Yes, they did. The people and the law and the clergy most definitely understood that too much alcohol can do bad things. Here's a few previous posts on alcohol in the Middle Ages for your perusal:

• u/sunagainstgold considers the prevalence of alcoholism and Medieval attitudes relating to;
• On norms related to drinking;
• And while it's Early Modern, psychoactive substances, of which alcohol is part.
• u/Noble_Devil_Boruta addresses intellectual and legal opinions on inebriation.

While not directly related to your answer, I also know exactly how these threads go, and if anyone so much as mentions that Popular Myth about pre-modern peoples drinking alcohol because the water was unsafe...I address that myth in this post.

And as always, if anyone else would like to address the question, please don't let this post stop you! More answers are always, always welcome.