The problem is that we do not know how long covid works, so both areas of research need to be considered. The discussion around long covid is very similar to the discussion around CFS. Both are somewhat subjective and not easily measurable, unless the form is really severe, yet to the people experiencing them are very real with a clear 'before' and 'after'. The exact mechanism for either of them is unknown. There is some evidence that CFS is caused by a viral infection (
https://pubmed.ncbi.nlm.nih.gov/32129496/). There is also some evidence that cognitive behavioral therapy can help with CFS (
https://www.nhs.uk/conditions/chronic-fatigue-syndrome-cfs/t...). So there appears to be both a physical and a psychological side to it, and that is likely to be the case with long covid as well.
Just because something 'might all be in their head', or has a partly psychological cause does not mean that it is easy to treat or can be dismissed, or that it won't happen to you. It just means it needs to be treated with appropriate methods, e.g. therapy.
The bottom line is that long covid most definitely needs to be considered both when setting public policy, and when deciding on the risks everyone personally is willing to take. And we do not yet have enough data on the effects that vaccines have on long covid or on the risks of getting it.