Night time shadows track a 'phantom' light source
As in vanilla Morrowind (and MGE XE) the main nighttime light source follows the reverse path of the Sun. This means that at night, shadows cast by this light are obviously coming from a fake light source.
Possible solutions include:
- Making the light track whichever moon is brightest (if any moon is out at all). There'd need to be a diffuse light fade out and back in when the switch between celestial bodies was made, otherwise there'd be a sudden jump.
- Fading out the diffuse light at night so shadows are fainter and less jarring.
- Turn off outdoor shadows at night.
- Ignoring the issue indefinitely as I've never seen anyone complain about MGE XE's shadows doing exactly the same thing.