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This article reports that users avoid pressing the home button on an unfounded rumor that using the home button will cause the phone to break.
What alterations should I make to accommodate this section of users? (or those that use the feature legitimately.
According to the website, it seems to overlay the lower left hand corner of the display that happens to coincide with my app's tabs.
None. Assistive Touch is built so users can drag it to wherever they like on the screen to not interfere with any app. Even if you chose to make your app "support" it, that change would also cause anyone else using the app without assistive touch to suffer. It's not a function that Apple allows you to scan whether it's active or not. Just don't do it.
The fair share of users use assistiveTouch to not have to go to a hardware key for home and have shortcuts at hand. This is persistent in Android too. The soft touch action on a screen vs the hard press of a hardware key offers completely different feel. Hence many users, me included choose to avoid the hardware key altogether. I have shortcuts to power off screen so I do not have to use the hard power key. However, I do not have any survey data to support these claims.
AssisitiveTouch is designed to move about on the screen, and it fades when not in use. That is because it is not intended to be a persistent element on the UI for all users. Considering these two points, trying to adjust to handle its position on screen is a overkill.
You need to design the application assuming that they do not have assistivetouch on. Since users know that assistiveTouch is on a overlay on the application, their mental model already considers this fact. At the same time, you have to keep design guidelines of apple in mind when you create interfaces.
