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This ingredient gets a bad rep because it is irritating and drying due to its astringent property. Astringents draw out natural oils in tissue to constrict pores and dry out your skin.

However, alcohol denat. is not all that bad.

Due to its low molecular weight, alcohol denat. tends to evaporate quickly. One study on pig skin found half of applied alcohol evaporated in 10 seconds and less than 3% stayed on skin.

This also helps other ingredients become better absorbed upon application.

Studies are conflicted about whether this ingredient causes skin dehydration. One study from 2005 found adding emollients to propanol-based sanitizer decreased skin dryness and irritation. Another study found irritation only occurs if your skin is already damaged.

Small amounts of alcohol are generally tolerated by oily skin or people who live in humid environments.

The rule of thumb is this ingredient will probably not affect your skin much if it is near the end of an ingredients list.

One thing to note:
People with ALDH2 (aldehyde dehydrogenase 2) deficiency may experience skin irritation from continued alcohol use. About 8% of the world's population have this deficiency.

The Cosmetic Ingredient Review Expert Panel has determined denatured alcohols to be safe for use in concentrations between 0.05% and 12% (depending on which denaturant is used).

Also...

This ingredient has antimicrobial and solvent properties.

The antimicrobial property helps preserve products and increase their shelf life. As a solvent, it helps dissolve other ingredients.

Look for formulas that contain glycerin, hyaluronic acid, or panthenol if you want to offset any drying effect.

This ingredient will trip away your skin's natural oils/lipids that help it lock in moisture. This can worsen dryness, trigger eczema flare-ups, and aggravate rosacea.

Be sure to patch test any product with this ingredient if you have dry or sensitive skin, eczema, or rosacea.

Interestingly, topically applied Palmitic Acid can be elongated into longer chain fatty acids and ceramides. A 2019 study found low levels of Palmitic Acid lead to slower development of cells, suggesting it plays a role in keeping your skin's renewal process on track.

The CIR (Cosmetic Ingredient Review) panel determined it safe as used in cosmetics at concentrations up to 13%. It is non-irritating and non-sensitizing in clinical studies.

The culprit behind fungal acne, the Malassezia yeast, feeds on fatty acids with carbon chain lengths between C11-C24. Palmitic Acid, at C16, falls right into that sweet spot.

In vitro studies have shown that Palmitic Acid is one of the fatty acids that induce rapid Malassezia growth in lab settings.

It's worth noting that what feeds yeast in a lab doesn't necessarily feed it on your face since formulation and your skin's chemistry play a bigger role.