Why does \usepackage[british]{babel} hyphenate the word "alternate" incorrectly?

According to the Oxford dictionary the correct hyphenation in British English is

al-ter-nate

The pattern for British English were prepared in 1996 by Dominik Wujastik using a list of hyphenated words made available by Oxford University Press and is present on CTAN as ukhyph.tex. In 2008, the team in charge of maintaining hyphenation patterns for TeX Live made a reorganization of the material; here's the start of hyph-en-gb.tex:

% This file has been renamed from ukhyphen.tex to hyph-en-gb.tex in June 2008
% for consistency with other files with hyphenation patterns in hyph-utf8 package.
% No other changes made. See http://www.tug.org/tex-hyphen for more details.

% File: ukhyphen.tex
% TeX hyphenation patterns for UK English

Some lines later we can read

%       $Log: ukhyph.tex $
%       Revision 2.0  1996/09/10 15:04:04  ucgadkw
%       o  added list of hyphenation exceptions at the end of this file.
%
%
% Version 1.0a.  Released 18th October 2005/PT.
%
% Created by Dominik Wujastyk and Graham Toal using Frank Liang's PATGEN 1.0.
% Like the US patterns, these UK patterns correctly hyphenate about 90% of
% the words in the input list, and produce no hyphens not in the list
% (see TeXbook pp. 451--2).
%
% These patterns are based on a file of 114925 British-hyphenated words
% generously made available to Dominik Wujastyk by Oxford University Press.
% This list of words is copyright to the OUP and may not be redistributed.
% The hyphenation break points in the words in the abovementioned file is
% also copyright to the OUP.

so I argue that the hyphenation patterns have never changed from 1996, except for the addition of a hyphenation exception list that reads, in the original file,

\hyphenation{ % Do NOT make any alterations to this list! --- DW
uni-ver-sity
uni-ver-sit-ies
how-ever
ma-nu-script
ma-nu-scripts
re-ci-pro-city
through-out
some-thing}

and is exactly the same in the reorganized files.

It is true that alternate hyphenates as

al-tern-ate

as the following file to be run with pdflatex shows:

\makeatletter\language\l@british\showhyphens{alternate}\stop

that prints

Underfull \hbox (badness 10000) detected at line 0
[] \OT1/cmr/m/n/10 al-tern-ate

on the terminal.

Hyphenation in TeX doesn't examine a long list of words, but rather uses a method based on patterns, described in Appendix H of the TeXbook. The patgen program distills a set of patterns based on a list of hyphenated words, but some compromise has to be made for efficiency of the algorithm, so it's surely possible that some word slips off and turns out to be hyphenated incorrectly.

That's what the hyphenation exception list is for. You can, until the problem is fixed by adding some suitable patterns or the word in the exception list, add it manually:

\documentclass[a5paper]{article}
\usepackage[british]{babel}

\babelhyphenation[british]{al-ter-nate}

\begin{document}
alternate alternate alternate alternate alternate alternate alternate 
alternate alternate alternate alternate alternate alternate alternate 
alternate alternate alternate alternate
\end{document}

The command \babelhyphenation requires babel version 3.9; for an earlier version one can use

\begin{hyphenrules}{british}
\hyphenation{al-ter-nate}
\end{hyphenrules}

which has the same effect.

this answer will not be as elaborate as the one by egreg, but i have some different information.

essentially everything egreg says is correct, but the clue may lie in exactly which oxford dictionary was the basis for the list of hyphenated words that dominik used.

i have just come into possession of a copy of the dictionary that was purportedly used: "the oxford minidictionary of spelling and word division". in it, the word in question is presented as

al.tern|ate

where the period represents a broken vertical, a "less recommended" place for division.

i agree that i don't find this "attractive", and certainly would question it, but then, i'm from the left side of the pond. (i was offered this dictionary as an aid to my editing of tugboat; since i aim for consistency of style -- either british or u.s. -- i gratefully accepted. i admit to surprise in many instances looking through it, but as i said, i'm from the western side of the atlantic.)

edit: here is a scan of the relevant page of the cited dictionary. in no word beginning "altern" is there a hyphen after the "r"; if there is a hyphen, it's always after the "n" (which i don't understand), but in the case of "alternation", that location is avoided completely, with the primary hyphenation point before the "-tion". a true puzzlement.

note: this image is from "the oxford minidictionary of spelling and word division", copyright by oxford university press, 1986, from a 1992 reprint. (i have neither requested nor received permission for this use.)

Update:
After discussion with a native British speaker, I was coerced into searching for an audio example of the pronunciation. I found a useful example at https://dictionary.cambridge.org/us/pronunciation/english/alternate which gives three forms (verb, adjective, and noun) in both UK and US pronunciations. The UK adjective is pronounced in this example with the stress on the second syllable. But so is the US adjective -- which is just plain wrong in my experience. (The pronunciation given for the US noun is also not what I learned, in any US regional variation.) So I concede that the UK pronunciation of the adjective may differ in the way that makes the hyphenation "al-tern-ate" appropriate. However, since the spelling of the three grammatical forms is uniform, this difference in hyphenation means that the word should be omitted entirely from resolution by the patterns, since no automatic grammatical distinction is possible. A conundrum.

Apologies for reviving this thread, but I didn't see this answer in here. I believe al-ter-nate and al-tern-ate to be two different words.

• al-ter-nate: a verb meaning to take turns performing two different activities, e.g. I alternate between running and walking.
• al-tern-ate: an adjective meaning every other, e.g. I go running on alternate Sundays.

They are pronounced differently, in the same way the word ate (as in to eat) is pronounced, and based on that it makes sense to hyphenate them in two different ways.