Why was "Bonnie Blue Flag" not on the CD of the soundtrack? The version in the film was a most unusual and arousing one - and mirrored an actual musical "Christmas party" which Lee and his genereals attended while at the front in December 1862
Yes, it was a great cinematic moment and one of the best musical numbers in the film.
My thinking is it was left off the Frizzel/Edelman soundtrack as a matter of dollars and cents. The performance was by the 2nd South Carolina String Band and had no fiduciary connection to the soundtrack composers. In other words that music was not arranged by Frizzel/Edelman and they would get no publishing royalties. The music by Sony artists Mary Fahl and Bob Dylan was probably added at Sony Music's bequest.
You can buy a somewhat similar version of "Bonnie Blue Flag" on the 2nd South Carolina String Band's own CD called "In High Cotton" at: