Disclaimer: those are mods that I especially liked this past month and that found a permanent spot on my modlists. I do not claim they are the best mods, nor do I imply others are not good. I am in fact enjoying many other mods not listed here.
Finally, apologies for not publishing my October Highlights: since I was taking part in the Morrowind Modding Madness, I felt awkward commenting on competing mods, not to mention, pressed for time. I am including here a couple of mods released in October that deserve a mention, albeit, a little late.

FMI

This is an on-going project to fix some inconsistencies in Morrowind between the game, the lore, the dialogues, books, etc. Poodlesandwich has compiled a list right here. Some have been tackled by Half11's Patch for Purists, quite a few others by Poddlesandwich and Gavrilo. Check their respectives mod releases here and here to get all the mods.

Tel Shadow's clutter monkey series

Tel Shadow has been super busy releasing 4 mods that simply add lots of clutter to a number of places. Egg mines, Vassir-Didanat Mine (not compatible with Mines and Caverns), Caldera Mine and Vampire Clans I hope she adds more locations later on.

Vvardenfell Brotherhood by Caeris

Caeris never disappoints and this mod will please all the Dark Brotherhood enthusiasts because there wasn't a good mod that lets you join the Dark Brotherhood. Now, we have a whole new joinable faction, with quests and dialogues and all of that while respecting the lore. Praise Sithis!

4NM_Randomizer by Archimag

I am a big fan of anything that randomizes my game (just making sure I will NEVER feel like I've seen it all). The 4NM series can be a little intimidating because of the sheer number of features but 4NM_Randomizer is very simple: the stats and size of creatures will now vary so stronger rats will be bigger and weaker ones, smaller, for example. Cherry on top, (since it's a magic lua mod) creatures added by other mods will also be randomized.

Morrowind Anti-Cheese by Remiros

For anyone who feels bad taking the alchemy set in Caldera Guild of Mages but can’t help themselves, this mod is for you! Did you think the enchantments on Soscean's Cuirass was OP? No more! Check the read me for the complete list of changes, in short, all those exploits you know and love, gone. Thanks Rem!

Adventurer Starter Pack by Gavrilo93.

Here's a nifty little mod that will save you time (but not money): Arille sells a starter pack with useful (very balanced) items so you don't have to go look in every tree stump around Seyda Neen.

Regional Bounty by Sushi

Finally: What happens in Balmora, stays in Balmora! You dreamt it; Sushi made it. Now, your bounty is retained per region rather than, well, everywhere.

Merlord's Starting Equipment

I've already mentioned this mod in my QoL modlist and here it is again. Your starting gear will now reflect you class, be it vanilla or custom. Because LUA magic, works with classes added by mods too.

Magic Mechanics by OperatorJack

Think of this as an addon for Magicka Expanded, and a very cool one at that: swing (attack/left click) you staff to shoot the enchantment? Yes please! This effectively lets you dual-wield spells: one in your staff, and one as a regular spell. The second mechanic (at the time I am writing this) is homing missles, well, spells.

Armor Auto-Balancer by Siltocyn

The best thing about this mod, is that being lua and therefore miraculous: armour added by mods will also be balanced. This means that armour added by Helluva Awesome Armor that I stopped using because their value/ratings were not balanced is now back on the menu! And because I am spoiled brat, I'd love to see weapons get the same treatment.

October highlights I cannot ignore

Morrowind Modding Madness mods

Check them out, so many very good mods. Allow me a little "Woot, woot" as my team won this year: Woot, woot!

Lootable spellbooks by SuperHobbit

A simple mod but much needed: you may find spellbooks, books that teach you spells where ever you could find a book. You simply learn the spell by reading the book. Casting it depends on your magical ability, of course.

Django's Dialogue 1.4

The older version of this mod has been on my permanent modlist since forever and updating to this new, bigger version was a no-brainer for me. and seeing as this mod has been a hot file for a while now, for many other players.

Spell Tomes by MateWushu

An elegant solution to scrolls limitations, in my opinion. Scrolls are single use and I tend to not use them (I hoarded them though!). Spell tomes are basically books that let you cast a single spell multiple times and as many times as you want... as long as you infuse them with your magicka.

MABO's mod suite

With these 4 mods installed, you will find a few (major) exploits are not possible anymore: drink a gallon of potions while the game is paused, cast a fortify spell for a second and open you inventory to make potions for half an hours, cast a "harmless" frenzy and remain innocent of the ensuing carnage... All gone.

Holy Art Retexture by Brujoloco

A retexture of the already gorgeous Holy Art mod by Lukkar and Von Djangos. This one looks more aged. Pick your favourite.