Aerial shot of mournhold in TR. Keep in mind that district walls are gone and that you can't quite see some of the overlapping of districts because of this. http://i17.photobucket.com/albums/b94/ThrignarFraxix/MournholdFromAbove.jpg
I was just joking there about lore stuff. But I won't call it an unintended physical mistake, I think those designers were well aware of what they were doing. I can only think for some limitation(time) they had to compromise(which is why I'm very sensitive to this issue, I hate to see compromises for technical/design limitations and it is against my signature, you see there is a equation but it doesn't say "=Morrowind", it is because of Mournhold. The day Mournhold opened, that signature will change ASAP!) from their original design and had to cut some stuff which ended with this weird design. Or some other factor... And now with TR, it is x100 more noticeable. In the end, it is a bad design choice, but nothing modding community couldn't fix.
I think we should use water to cover both inner and outer walls intact. Change the wall design, fill the openings with water in and out. Or maybe grave stones like the ones in Cyrodill for inner openings.