Yes, pasting with ⌘V in iTerm2 works.
I've unsuccessfully disabled all other apps under Settings > Privacy > Accessibility. I've also tried slowing down both 'Key Repeat' and 'Delay Until Repeat' under Settings > Keyboard. And also temporarily quit BetterTouchTool and Karabiner.
I'm attaching the iTerm 2 key mappings, if you see anything potentially interfering. Hopefully snippets in iTerm2 still work on macOS 10.11, since this is the major/only usecase I have for Alfred. Looking elsewhere on forums, this implies that a backwards breaking change was made to accommodate for macOS 10.12?