I sure hope some people on the border of Morrowind got out, come on not everyone in Morrowind could died. We just know that the asteroid or meteoroid that was frozen in place hit Vivec and [censored] everything up. There must of been at least some time for some people by the borders to get out. Also, maybe Morrowind already heard of Umbra and some escape party or whatever. The thing is we are not informed as much so we are kind clueless to many holes in the story now.
I didnt read the book but here's what i can piece together:
Vivec and some of the surounding area was destroyed by the impact, it's likely that nobody in Vivec survived that, plus all settlements around the body of water Vivec was in would be destroyed, however the outer regioins of Vvradenfell and morrowind-mainland are largely unaffected.
Red Mountain erupts shortly after the impact and starts spewing out lava, even when assuming the volcanos caldera was a lot larger than it appeared, like a supervolcano, it still wouldn't wipe out everything instantly so i guess a lot of people had time to escape Vvradenfell, especially since a lot of settlements are closer to the eastern and western coastal regions that are likly to be affected last.
Mainland Morrowind was not affected too much by the impact and red mountains eruption, though it's likely some damage was done too. Here the Argonian invasion hit but that could only progress slowly leaving enough time to evacuate.
In the book it's said most Dunmer fled towards Solstheim but i also think the north-east of Morrowind is also in Dunmer control like the Telvani Islands. I think the Argonian invasion didn't push all the way over Morrowind, probably only towards Mournhold and overthrew the current government, i think the areas north of there are either evacuated or still in Dunmeri hands.
Most mainland refugees probably fled towards Cyrodiil, the Vvradenfell refugees towards the Telvani Islands and Solstheim.
Now, as mentioend before, there just needs to be a way to solve the whole invasion thing and i REALLY hope it's not settled by large scale war, sudden mass-death or a "Deus Ex Machina" just ending it. I'd really love to see it solved by politics instead with both sides comming into an agreement.
Personally mostly because i don't wanna see the Argonians getting demonized over that, the invasion pretty much was revenge for the millenia of slavery and invasion BY the dunmer in Black Marsh, plus that they nearly drove the Hist trees to extinction.
Many would say "But the new Morrowind leadership stopped slave raids and invasions", though i must remind you how fast a governemnt can change or at the drop of a hat suddenly change their minds. Plus after millenias of getting treated like that it sure wouldn't be all forgotten, fine and dandy after just saying "OK, we'll stop now".
PS: Don't confuse "Morrowind" and "Vvradenfell", Vvradenfells is a region IN Morrowind, a big one but not all of it.