In case anyone else can benefit from my experience with this:

I ran into this issue running Morrowind on my Win8.1 setup. The game (Edit - GOTY CD) by default was installed in the \Program FIles (x86)\ folder but I copied it another \Games\ folder as recommended. I also at some point must have uninstalled the game (from control panel->programs->programs and features) from Windows. Other than the priority setting being stuck low, everything worked fine.

What I found was that re-installing the game into the Program Files (x86)\ folder fixed the issue, even starting the game executable in the \Games\ folder. I'm not a windows expert but I'd speculate it might have something to do with registry settings or something like that. Maybe there are other reasons for priority to get stuck low, or cases where it won't be , but at least my priority stuck issue was solved fairly easily this way.

Edit - The net result was a small but measureable (~5-10%) increase in framerate under heavy CPU/GPU loading test conditions.