Definition of "albeit" and how it's different from "although" (if it is)

I'm trying to write good English even if I'm not a native speaker. My phrase goes something like:

I then realized program X doesn't provide classes for Y (albeit its excellent support for Z).

Is the word albeit used properly? I tried a dictionary, and one definition says it's similar to although, although I'm pretty sure that word doesn't fit in that particular sentence (see what I did there? I do know how to use that word, at least).

Yes, albeit does just mean although.

There, you seem to be using "albeit" to mean "despite", which that word does not mean.

Why not just use the word "despite"?

Albeit means "although it be". Without the verb indication of state "be, is, was" it is not felicitously dealt with; here the statement should read:

I then realized that program X doesn't provide classes for Y (albeit an excellent support for Z).

Without the use of "it's" which is already provided in albeit (all be it) therefore, although is not an adequate synonym for the word.

Garner in Modern American Usage has a good entry on this. He says:

Though Eric Partridge pronounced this conjunction archaic, it thrives in AmE. Labeled “literary” in the COD, the word albeit means “though.” The predominant modern use for albeit is to introduce concessive phrases - e.g.:

- “How did one of the most respected engineering scholls in the country, albeit the smallest_, reach such a low point?” [...] 26 Oct. 1996, [...].
- “There may be another way, albeit unconfirmed, to increase your odds.” [...] 17 Mar. 1997, [...].

Albeit may also begin a subordinate clause, albeit though or although is mor natural and more common with this type of construction - e.g.:

“The state will let the free market do it, albeit the effects may accrue more unevenly and, perhaps, more brutally.” [...] 25 Oct. 1996, [...].

Also, on Common Errors in English Usage by Paul Brians (2nd Edition) we can read:

“Albeit” is a single word meaning “although”: “Rani’s recipe called for a tablespoon of saffron, which made it very tasty, albeit rather expensive.” It should not be broken up into three separate words as “all be it,” just as “although” is not broken up into “all though.”

According to preceding references, your usage of albeit is correct, albeit although is more natural:

I then realized program X doesn't provide classes for Y (although it[']s excellent support for Z).

Merriam-Webster lists albeit's etymology as literally "all though it be," and as best I can gather, that's still how it's used today. Your sentence could perhaps be better stated:

I then realized that program X doesn't provide classes for Y (albeit excellently supporting Z).