Hi!

I have two problems with my mod, let me explain.

Missing worldspaces, items

I built my -quite large- mod, for a few months, but I encountered some problems in CS.

As the data growing, CS became more and more unstable, there were frequent crashes, and strange phantom-edits (a few trees appeared, objects gone/moved, etc). i installed the latest CS Extender, which is a brilliant stuff, but there are still random CTDs, especially when I working on places containing a lot of objects, like trees, rocks, and so on.
As I learned (probably well), solution can be to convert the plugin to esm, then continue the work to an additional esp, which containing the additional changes, of course. It worked like a charm, no crashes, fast, and so on...

Well, I tried to save the current state as an esm (OR previously converted with Gecko - does not matter, both ways have the same effect).
I loaded up the esm in the game. Everything which is affected by the mod, was gone entirely or partially. Player falls down, like items, enemies. Many objects are gone. Only a few (static only) objects remained in place.

When I change back to the esp, everything is okay.

What I did wrong, or misunderstand? I don't want to release my work such unstable.

For Oblivion, if a *bona fide ESM overrides another's WRLD/CELL children in any way, the ground'll fall out from under you as you describe which is why Beth made all of Oblivion's DLCs esps. From Fallout 3 on there are ONAM lists in ESM file headers which list overridden REFR, ACHR, ACRE, NAVM, etc. records, allowing ESMs to override other ESMs. After the advent of these ONAM lists, Elminster added a masterupdating feature to FO3/FNVEdit which adds said ONAM lists to false flag esps by ticking their master flags yet keeping the esp file extension since, without masterupdating, there were all kinds of problems with adding/overriding placed stuff. The inverse works for Oblivion.

*ESM flag ticked in file header and file has ESM file extension

Try, with TES4Edit, unticking its ESM flag yet letting it retain the ESM file extension so it's an inverse masterupdated, false flag ESM. It'll load as the last ESM even if WryeBash/OBMM shows it above other bona fide ESMs.

A custom ESM can not edit worldspaces (and cells too?) that are part of Oblivion.esm, or else you will get missing land like that. Which is why SI is integrated into Oblivion.esm and not it's own ESM.

Like JustInOther said you would need to change it back to an ESP when you're done. changing the extension though will not do it, you have to change the ESM flag in the file which Wrye Bash and what not can do.

Cells too, unless it's a false flag ESM or bona fide esp.