I see it more as Alfred joking a bit, implying that he can understand Tim's motivation for behaving that way with Damien, but being sure to emphasize that he is not officially endorsing it. After all, Damien has killed people and threatened to kill Tim, I believe.
That remark gives off a vibe of pettiness I can't imagine ever associating with him.
Idunno, I'm sure he's made petty remarks to Bruce out of frustration. If Tim had been there and a conversation could've taken place, I can see Alfred going on to say something about how Tim has to understand how insecure Damien is probably feeling and that Tim mustn't second-guess his importance to Dick or Bruce, etc.