Michelle Crafton, the owner of a tiny bakery in this struggling town 30 miles south of Indianapolis, is not sure what she would do if asked to cater a same-sex wedding.

Crafton, 42, is a churchgoing Christian who believes homosexuality is a sin. But she also has a gay cousin – “I’ve loved him ever since he was a kid,” she said – and if she did say no to a gay couple, she would struggle over a polite way to tell them.

As the debate over a law promoted as defending religious freedom but criticized as anti-gay convulsed Indiana last week, Crafton might be excused for also being unclear about whether it would give her the legal right to refuse such service. She and other supporters of the law had hoped that it would.

But on Thursday, after an outcry from business leaders, Gov. Mike Pence, a Republican, signed a revised version clarifying that the law could not be used to justify discrimination based on sexual orientation or gender identity.

If Crafton was sure of one thing, it was that all of the national attention had given Indiana a black eye.

“I just don’t like that they say we’re intolerant,” she said Thursday from behind a counter stocked with pastel Easter cookies and red velvet cupcakes. “Because that’s not who we are.”

Though the people of Indiana have been starkly divided over the law and its possible effect on gay residents, there is a more general agreement here that the raging debate – fanned by the large corporations that have objected to the law, national interest groups and out-of-town news media – has tarnished the state’s reputation for magnanimity and reflexive friendliness.

“’Hoosier Hospitality’ has been a phrase that I’ve heard my whole life,” Stephanie Dolan, a journalist, wrote recently in NUVO Newsweekly, an Indianapolis alternative paper. “It’s hokey and it’s corny, and – if you’re easily annoyed like me – it’s a bit off-putting in its sappiness. But there was never any mistaking its sincerity.”

“Now?” she added. “I can only think of that phrase ironically.”

The perception that the law had created an unwelcoming atmosphere was shared by a number of business-oriented conservatives. That has been particularly true in Indianapolis, the state capital, which in recent years has emerged from a postindustrial slump into a period of urban renewal built in large part on the convention industry, big sporting events – like the Final Four of the NCAA men’s basketball tournament this weekend – and an emerging technology sector.

Business-friendly policies certainly played a part, but so did a carefully tended message that Indiana welcomed the world.

Chuck Brewer, 43, who owns a sandwich shop near the city’s convention center and is running for mayor in Indianapolis as a Republican, said the law was “not an encouraging move by the legislature to attract business and conventions and investment in Indiana.”

“It’s hard to have something like this ruin the reputation of a state and city that have tried so hard to be welcoming,” he said.

But as rapidly changing attitudes toward same-sex marriage have swept across a state still largely defined by the slower rhythms of rural life, some friction may have been inevitable. A number of residents interviewed here seemed to be living on the cusp of tradition and change, and harboring opinions too complex for placards.

Cody Button, 22, who is gay and works at a lawn and garden center in Indianapolis, recalled starting his high school’s first lesbian-gay-bisexual-transgender group a few years ago, after he was criticized by faculty for kissing a boy in the hallway. But when it came to the religious exceptions bill, he was torn.

“It makes me feel for Indiana, all the businesses that are backing out,” Button said. But he also said he understood why business owners might want the legal system to protect them if they refused to serve gay customers on religious grounds. He noted that a friend’s father, who runs an environmental remediation company, faced a similar situation recently when asked to do a job for a satanic church.

Inside Crafton’s bakery in Martinsville, David Trout, also a Christian who supported the law in its original form, said he had once vowed never to attend a same-sex wedding. But a few months ago, Trout, 55, found himself saying yes when a lesbian couple who are friends invited him to their ceremony.

“I saw how happy they were together,” he said. “At the wedding, I hugged everybody. I’m a hugger.”

On the other side of the town square Thursday, Ryan Colwell, 41, a Pentecostal Christian and the owner of the restaurant Cafe 166, was sporting a Jimi Hendrix T-shirt and preparing specialties from a menu that includes barbecue chicken pizzas and portobello mushroom sandwiches.

Colwell said he also catered weddings and had been consulting with his pastor to work out a plan if he was ever asked to cater a same-sex wedding, which he feels his faith precludes him from condoning.

“I would cater a gay wedding,” he said, but only if he could drop the food off “and leave, and not have to stay and observe.”

Colwell said he also supported the original version of the law because he thought it would give business owners the right to deny services if delivering them offended their religious sensibilities. The revisions disappointed him.

“To me, it’s almost repealing the law without repealing it,” he said. “It hurts me to know that if I take a stand on an issue based on my religious convictions, that I’m labeled as a discriminator, and I’m just not.”

Crafton said she supported gay couples’ right to have their relationships recognized under the law. And despite her religious reservations, she said she might cater a same-sex wedding if she felt comfortable with the couple.

“It comes down to the people,” she said.

She said she would never turn away gay customers who walked into her store, unless they were excessively rude. But that, she said, applied to everyone.

In the more diverse and gay-friendly capital, many said the law had always struck them as the height of rudeness. Some characterized it as a solution in search of a problem.

Enza Papalia, 69, a native of Italy who immigrated to the United States in 1963, laid into Pence on Thursday afternoon from behind the counter at J.Papalia Tailoring, a renowned Indianapolis shop established by her husband.

“What is he trying to prove?” she said in a voice still redolent of her native land. “What’s the point? Is anything good going to come out of this?”

Carl Levinson, a software engineer and friend who was visiting for lunch, said Indiana had been “unfairly criticized” for the controversy.

“I’ve just been embarrassed by this whole thing,” he said.

© 2015 The New York Times Company