That image looks like a character carrying the body of a reskinned...Bonewalker? Either way, the texture replacers and MGE shaders pretty much imply this wasn't taken through DOSBox. Seriously, how the hell do you re-write the Morrowind executable to require DOS? It makes no sense at all. Has to be fake.
It's the audio from the mod. If you listen carefully, you'd realise that even though it sounds like the dunmer voice actor, it's actually a different voice trying to sound like it. Definetly not a splice, new voice acting.
The word
watch seems to be pronounced differently than I recall the Ordinators saying it. Of course, the entire thing sounds pitch shifted to me - not new dialog.