This thread reminds me of one of my favourite Stevie quotes:
"I feel I can write about myself through Sara and that people will understand. Because I can’t write all these songs and call them all Stevie [laughs] I have to come up with something different. So I pick out names that I especially love like Rhiannon and Gypsy, even though gypsy is not a name, to me it is a name… Juliet of Romeo & Juliet, Alice of Alice In Wonderland. So I write my own stories about me through them."
That quote always makes me laugh because she's right, pretty much all her songs are about herself, but I definitely think there's a little bit about Sara Recor in that song. I think she probably denied it at the time because Mick left her for Sara and over the years that's the story that has stuck.