In the 1911 LDS edition, the original we near the beginning of the verse was accidentally replaced by ye. The LDS text has continued with this reading. Although ye works, we is correct, as we can see later on in this verse when the text uses the we once more (“and thus we see”).
Also note here that there is no subordinate conjunction that after the second occurrence of the verb see (“and thus we see / they became subjects to follow after their own will”). The preceding see does have the that (“and now we see by this that our first parents were cut off ”). As discussed under Alma 27:2, that is optional for finite clauses complementing the verb see. For a more general discussion, see under that in volume 3.
Summary: Restore the original pronoun we near the beginning of Alma 42:7 (“and now we see by this that our first parents were cut off”); maintain the later occurrence in this verse of we see that lacks the subordinate conjunction that (“and thus we see / they became subjects to follow after their own will”).