The phrase "strange fruit" refers to a lynching. Billie Holiday had a song entitled "strange fruit" and it was about the lynching of innocent black men in the 1920s.

I interpretted this song as Sally and Johnny are a mixed marriage and the local vigilantes "rescued" her from a fate worse than death. And this is why we wonder "who's going to dance with Sally Ann?" when she would have married an African-American.

Mark O'Connor has a nice version of this on his Nashville Cats album from about 1985.