I think it's a bug in the distant static generation process. Basicly MGE checks and generate statics sequentially for each master or plug-in you choose initially and it doesn't checks if the references are moved or updated. A practical example: take a reference in Morrowind.esm - for example an house in Seyda Neen then move it or delete it and save this as a new .esp. Launch the wizard again and choose Morrowind.esm and your new plugin. When you will have regenerated the distant statics you will see the house both in the old position and in the new position if you moved the reference, or the house in the old position that fades out if you have deleted it. I don't know if it can be fixed.
This is not a bug - it's how the function was designed.
When Distant Statics are created, the DL Wizard will look thru each esm/esp specified in the plugin selection step and generate placement data for every reference that meets the minimum static size setting.
MGE gives you some amount of control over this at the time of distant statics creation thru the exception list - either by ignoring the mesh for entire groups of objects, or by adding specific object ids to the [names] section where you want other object ids to still render which also use the same mesh.
The best way to handle a moved reference for an esm so that MGE will render it correctly would be to create a new object in CS by renaming the original object and then Find & Replace the moved reference to use the new renamed object. If the original object is used more than once then each reference will need to be replaced with the new renamed object (whether moved or not). This will allow you to add the original object to the [names] section of an exception list to prevent MGE from generating a distant static for that object so only the new renamed object references will be rendered. You then use that new esp for both Distant Statics creation and in your active load list.
For moving an esp reference it's best to update the original esp with the new position and use that instead.
Basically you're creating a replacer for both MGE distant static creation and for overriding the original esm/esp in-game thru the active load list so that what MW and MGE render will match up.
Adding functionality to MGEgui to generate distant statics so that only the last reference of an object index is used might be possible, but ASAIK there is no specific order for which plugin gets precedence - do you give precedence by the plugin selection order? By plugin datestamp? What happens if you want an older plugin to have precedence over a newer one, but you don't or can't change your load order?
Use of the exception list is sufficient, and it helps when modders make sure to create new instances of objects that they want to move - it's good practice in any case, whether MGE is involved or not.