Sometimes if I commit a crime, guards are able to arrest me from afar. If I shoot a guard across the river in balmora for example, that guard will turn around and I'll immediately get arrested despite there being a river between us. I have 100% confirmed there's no other guards around me doing the arresting.

I think that probably happens in vanilla. My guess is it's scripted. I had the same issue in the main quest at one point you are supposed to sneak by some temple guards and they were able to initiate conversation and tell me to leave even though I was invisible and sneaking and they never saw me. As soon as the conservation was over I was still undetected and could just continue on, if I didn't agree to leave.

Morrowind AI is rather primitive and I think these types of conversations are initiated by scripts, rather than the AI actually catching up with you to college you. That's just my suspicion though. I've never actually checked the CS to verify.

These guard related "scripts" are hard codes, if I remember correctly, so we can't check these things in cs. OpenMW....