The story
An alteration of albeit, replacing it with they. Albeit literally means “although it [may] be”, but has become univerbated as a conjunction in Standard English. Accordingly, a phrase like “they were good parents, albeit indulgent” should be read as “albeit [that they were] indulgent”. Speakers who are still aware of the underlying construct, however, may feel that they should be used for “proper” agreement. (Theoretically, this would require other forms like *albehe, *albeshe, etc., depending on the context.)
Etymology from Wiktionary, CC BY-SA 4.0.