Not the freshest fruit in the basket, but since we're here, I'll give ya my version of the story based on what little Stapleton has said, a handful of previous Google searches, some light court case reading, plus my own assumptions and opinions.
One fateful day, Stapleton's band was jamming during a soundcheck (I think this took place in the studio), and someone played a snatch of "I'd Rather Go Blind" by chance and pros being pros they all just jumped in on it. Stapleton was digging the vibe, and for whatever reason the lyrics to "Tennesee Whiskey" popped into his head so he starts singing them in a style appropriate to the tune. Now, say what you will about the creative merits of this, but that's how artists often times work. Countless artists have struck gold from similar instances of "idea sex", mixing 2 or more ideas to come up with something new. (Hell, when I was in my first rock band in middle school, one time we were messing around playing "War Pigs", and I jumped in with the lyrics to "Thank God I'm a Country Boy" by John Denver but matching the "War Pigs" cadence and style. I have no idea why that gem hasn't become a bar band staple.) So, Stapleton and company are vibing on this mash up. It becomes real obvious, real quick that it's a banger, and his fantastic producer, Dave Cobb, strongly suggests they put it to tape. It ends up on his first major label solo album, and I'll be damned if it isn't one of several songs that makes Traveller a quadruple platinum success at last count.
So, let's talk about the legality/ethics of it all. There was never any pretense that it wasn't a cover of an existing song. "Tennessee Whiskey" had been previously recorded by both David Allan Coe and George Jones, and the original songwriters of the lyrics, Dillon & Hargrove, received the full credit for Stapleton's version as well. No shady business there, ethically or legally speaking. But was credit owed for the obvious musical snatch from Etta? Well, Etta didn't really write the music, at least not the parts they borrowed. She's credited for the lyrics and melody to "Rather Go Blind", but Stapleton didn't use either of those. Now, you may be thinking, he did use the vocal melody. To my ear, all I'm getting is a play on the vocal stylings of Etta but not the melody itself, so that's not really covered by songwriting copyrights. Ok, but the music? Well, it's a super simple 2 chord vamp, not exactly an original musical composition there. Legally, without going too deep into the case law, a 2 chord vamp is going to fall under "fundamental musical building blocks" and not the "protected elements" of a composition. Sure, but the musical stylings! They ripped off the parts too! You say. There, I have a tendency to... almost agree. The Stapleton band was absolutely borrowing the musical stylings of the FAME Studios' legendary house band, The Swampers, if not note-for-note, certainly they were emphasizing the same key elements that define the song. But are those "protected elements"? I'm not a lawyer, but I did stay at a Holiday Inn Express last night. I'm gonna say no, the studio band's parts are not protected by the songwriting credits of Etta James and her then partner, Billy Foster (who, for the record, did not have anything to do with writing the song). Oh and another interesting note about the songwriting credit on "I'd Rather Go Blind" that should be mentioned, Ellington "Fugi" Jordan actually came up with the song idea in prison and shared it with his good friend Etta James, who put a bow on it and conveniently forgot to give him any credit. So, who were they supposed to credit for the music? I mean, it would be great if they could give the Swampers their due, but the Swampers were paid for the session and that's it. They didnt get writing credits for the music, and that basically means they can't be credited for the Stapleton version either. Now, all this business was of course reviewed by the label's lawyers and deemed legally compliant. Chris, for his part, was probably advised by said label and/or lawyers not to mentioned the heavy-handed borrowing of the "I'd Rather Go Blind" music, as they wouldn't want to have to waste their precious resources defending their easily defensible position on the matter. So that's that. I wouldn't call it a rip-off in almost any sense. The original songwriters were credited. Stapleton isn't getting songwriter royalties from someone else's work, but he certainly has profited from the recording. Is it all on the up and up ethically speaking? We're talking about the music industry here, folks. When was ethics ever a factor? If they were, both Ellington "Fugi" Jordan and the Swampers would have profited from the success of "I'd Rather Go Blind", and yet they didn't. Business is business. You want ethical? Go.... well, I can't think of any ethical businesses, so I dunno, be a buddhist monk or something.