I would guess it is due to the fact the Undead in Undead arise are actually NPCs. Only creatures can be Type "Undead". It's give and take, guys. You either have armor wearing NPCs that look like skeletons and such, or you have Undead creatures who can't wear armor. That's either a limitation of the game or just how the mod is written, I can't be sure, but I do know you cannot mark an NPC as Undead and the "turn undead" spell doesn't work on NPCs.
Oh, that only means I need to use demoralize and calming spells then. I was wondering why the author didn't mention changes to resistances in his readme. The answer was sitting in front of my face the entire time.
Its still a bit of a shame, though, since that spell type is no longer viable.