From "Highlander 2" on Wikipedia:
On the planet Zeist, a last meeting is held between the members of a rebellion against the rule of General Katana. The rebellion’s leader, Ramirez, chooses "a man of great destiny" from among them — Connor — to carry out a mission against Katana. At this moment, Katana and his troops attack, crushing the rebellion. Katana orders his men to capture Ramirez and Connor alive, and kill the rest of the rebels. The two captives are put on trial by Zeist’s priests, who sentence them to be exiled and reborn on Earth in pursuit of "The Prize." Winning the Prize gives the victor the choice to either grow old and die on Earth, or to return to Zeist. It is worth noting that alternate cuts of the film have these events transpire in Earth's distant past rather than on Zeist. Katana is unsatisfied with their decision, but the sentence is executed, leading to the events of the original 1986 film.
What exactly is the story behind this "alternate cuts" - which are at least somewhat conforming to the first "Highlander" movie - vs. the Zeist storyline which clearly contradicts it? Why was the universally-hated-by-fans Zeist version chosen?
I'm fine with an out-of-universe answer, but it must be based on sources related to the franchise (and especially H2 movie), not mere speculations/guesses.