It's a debate as old as time, and one that will be waged for as long as we continue to use the Queen's English, or something similar.
Every part of this great nation of ours has different dialects and ways of saying the same thing. It's like the old argument of whether you drink pop, soda, or Coke. When I lived in New England, it seemed strange to refer to a drinking fountain as a "bubbler," I'd always called it a "fountain" or "water cooler." (There, a fountain is something in a park or backyard.)
This weekend, the subject came up over the word "y'all" and if that was the preferred nomenclature in Lubbock. My wife and her daughter thought that I was crazy when I gently reminded them that "Y'all" was perfectly acceptable, and actually the preferred way of saying the term "you all" in West Texas.
They argued that since their arrival, they've not heard "y'all" as much as "you all" in everyday conversation. My wife's daughter also argued that "y'all' is NOT a Southern/Texas term, and that it's used more often out west simply because she and her friends used it a lot.
I then reminded them both that they need to get out of the house more often. "Y'all" is everywhere, but it's primarily Texas terminology. We even have charts and graphics to back it up.
We also got into a major brouhaha over pecan, which I will now admit to being wrong about. (I called them pee-cans -- sue me.) I've also caught myself using the term "freeway" here in Texas, which means nothing. Everyone knows that we drive on "highways" here. Freeway is a West Coast term that I need to expunge from my vocabulary rapidly.
My wife did supply me with the following "how-to" Youtube video on how to properly say "y'all", but you can judge for yourself.
Business Insider also had a wonderful primer on what the preferred dialog is for most of these disputed references nationwide and how to speak if you want to be considered a local. Turns out, I'm not as savvy as I thought I was.
However, yes, it is "y'all" here in West Texas, not, "you all." "Y'all" is perfectly acceptable, along with the compound term "all y'all," which is correct when addressing gatherings of people.
So, yes. "Y'all" is perfectly acceptable, and "you all" makes you sound like a hated Yankee.
Y'all come back, now...y'hear?