what are you talking about, serana and harkon look normal except for their eyes...nothing "ugly" or sickly looking about them. Also theres still stage 4 but you no longer get hostility for it
personally i hate how going vamp makes my guy look like a meth addict. IMO you should remain normal looking so long as you feed and then get more sickly looking with each stage of vampirism as you're deprived of blood (life) and closer to a corpse....it makes sense but beth doesn't like to do things that make sense

Yeah, you can still tell they are vampires just by looking at their glowing eyes. I know there is stage 4, and there is no hostility because Bethedsda wanted to please the little children.
I hate it too, but the looking more monstrous by dieting blood is a Cyrodiilic vampire trait, so it wouldn't make sense for the Volkihar to have that at all. So in a way, lore is not ultimately butchered since.
A) The Volkihar always look ugly as hell with the exception of the purebloods, who still can't blend in.
b)They don't get attacked due to gameplay reasons. But shove a Volkihar into a tavern or a city in true lore scenarios and see what happens
