But the reason that Caius was recalled was "some concern about [his] sugar." If his superiors gave him that excuse, even if it was for other reasons, they wouldn't have needed to mention his cover, because they're his superiors.
But either way, there seems to be more evidence for him doing skooma than evidence to the contrary.
No... The reason Caius was "called off" was to investigate something. The "sugar" thing is a cover for the fact that he was called off to investigate the assassinations of the Emporer's sons.
Take in mind, however, that OB does sort of take place during Morrowind. The OB crisis does take place after Morrowind, but the Nereverine didn't exactly complete his task in a week or two. It actually took a while. I think maybe two to four years. It would be really hard for one man to do all of that on his own so quickly. Had he some assistance, maybe, but he was alone. So it took him a while.
Caius, was investigating the deaths of the Emporers sons. That is why he was called away.
Now the Empire can't exactly let all of it's citizens know that the Emporers sons, much less the Emporer himself were being assassinated.
The "moon sugar" thing is just a cover to hide the true reason. Thus preventing panic.........