Good idea. I'll make an alternate morrowind install for Sunfall (already got like 4), so it doesn't matter much to me, but most people probably won't go to much trouble.
A separate, clean install is going to be a must for Sunfall. It's that boy on the playground that can't play dodge ball with the other kids because he's huge and every time he gets the ball, he takes out half the opposing team with one toss.
There's practically nothing I'm not going to touch in some way. All the vanilla interiors are gone, most of the vanilla cities are destroyed, the ruins are being completely replaced, the Grazelands are going to be home to Crafthold, the city dedicated to Sotha Sil, the West Gash will have Almalexia's city in it, Red Mountain is going to look like it exploded rather than erupted (which makes plenty sense, given that in the First Era, a Red Mountain eruption cracked the province of Morrowind in freaking half), there's going to be huge towering House Dagoth fortresses all over the place, and plenty more where that came from.