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When it does this, it makes a bunch of optimisations, such as skipping smaller meshes and combining several meshes into one (Morrowind's meshes tend to be less limited by triangle count than the number of individual meshes that the CPU needs to tell the GPU to draw), so it can get a higher framerate than just loading them normally would, but it means they can't respond to things like being moved, removed or added by scripts, which can happen for anything, as Morrowind doesn't distinguish between static meshes and ones that might move at some point. To get long view distances with statics in them, MGE XE requires you bake the statics into distant terrain files before running the game.
