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Completely random lists won't work because the game isn't designed around inserting randomly generated characters in the game. A minotaur can only use certain weapons, and can't equip armor by default. The animations aren't there for him to do so, there aren't meshes for armor that would conform to his body shape, etc. And even if you did randomize things as much as you could, it still wouldn't prevent crashes from mod conflicts.
The pros of using leveled lists are that you don't run into a level 80 character in full daedric armor on level 1 that instantly kills you. The cons of a randomized list are that the game would be impossible and would still crash from mod conflicts.
Obviously that wasn't a good decision, as it would mean the players have to make their each level ups as efficient as possible, or else they will end up with characters with 'high level but low stats' that will make everything around them far stronger than they are, which goes against what they have intended.
There are ways that leveled lists can and have been improved. For example, many of the overhauls like OOO will create zones where certain enemies have a minimum or maximum level, and they limit the equipment that some enemies will have. So you may wander in to areas that have enemies that are too strong to take on early, possibly guarding very powerful equipment or powerful bosses. SImilarly, you can get the feeling of progression from facing some enemies that are much lower level than you. And daedric/glass by lore was supposed to be very rare, so preventing it from showing up on every bandit after you hit a certain level makes some sense.
That's why Speech-Craft isn't a skill worth investing in because it gives you bonus points to personality despite personality being pretty much useless. As fun as it is to have an entire city be your best-friend and then start a fight with the guards to watch the madness unfold, it's really not anything worth investing in. Shame, really.
I've never seen anyone complaining about Morrowind's level scaling that makes the players actually weaker the more they try to level up without doing so efficiently, whereas in Oblivion - despite having the same level-up system as in Morrowind - people complain a lot about level scaling. So the problem is the Oblivion's leveled-list that always try to match the level of the players.
Imagine Cliff Racers in Morrowind being always at the same level as the players with its matching stat formula that keeps up with its level, just like how Oblivion did with bunch of other monsters. Can you imagine that?
Level up Athletics on accident or Alchemy or Mercantile and your entire build is ♥♥♥♥♥♥. On lower difficulties it's not really a problem, it's only an issue when it's maxed out, which most people don't play so they never really notice. The reason no one really plays maxed out difficulty is because of the myth that Oblivion is literally impossible maxed out and the reason it's literally impossible is because the game never explains how the bonus attributes work and the people who are aware of it aren't interested in the extreme micromanaging required to pull it off and so choose to play on a lower difficulty where the downside of tripping over a rock and leveling up acrobatics isn't a run ending accident.
They screwed the pooch pretty hard on the leveling system in Oblivion and their solution to the problem in Skyrim is an extreme overreaction. "You can't ♥♥♥♥ up builds when attributes aren't a thing!"
The entire world leveling with you only makes sense if you got a ♥♥♥♥♥♥♥ huge map to work with. Like.. TR as an example, is big even unfinished. You don't want to play around in Varrdenfell until basically level cap, then go do stuff in TR just to find that everything is stupidly easy and the rewards are abysmal.
In the case of TR their quests aren't perfect, but their solution is much better. The TR world actively changes based off other things you've done, some of the quests interacting with eachother. (Kill X deadra lord for a quest and he pops up in a different quest as an alternative means to finishing it.) or my personal favorite, Skill-checks. You can do a quest normally, or you can use your high skills to either complete it instantly, change the reward, change the outcome or allow you to pursue said quest in a different manner.
You see, if you make a same mistake in Morrowind, it's not exactly a big deal. Your build won't get screwed if you accidentally level up a skill that you have not planned. Why is that?
Why do you have to micromanage your each level ups in Oblivion, and you don't necessarily have to do so in Morrowind?
The reason is simple. Oblivion punishes the players for leveling up their characters inefficiently, by having a leveled list that always level up with the players, whereas in Morrowind - thanks to its leveled list that doesn't always level up with the players - shows a little forgiveness towards those who did not make their level ups as efficient as possible.
So yeah. The leveled list is the issue, not the leveling system. Please read.
I think you were tripping with something at this point.