Hi, here's the review.

Let’s start with the biggest technical issue - your file isn’t dependent on either Tamriel Data or Tamriel Rebuilt ESMs. I know that your quest is set on Vvardenfell, so it technically doesn’t need it, but we still need you to demonstrate that you understand the setup of our NPC scripts. I suggest you take a look at other TR_m0 NPCs that are already in Tamriel Rebuilt, and set-up your NPCs to use the same scripts. And also, using NPC scripts and the generic local variables will be required for some of the things that I’ll ask for later.

I’ve got a few issues with the design of your quest that will require fairly big structural changes.

• First of all, the quest violates the “no-betrayals rule” multiple times. This is an informal rule that the Bethesda writers had when making Morrowind, and that is that key NPCs couldn't turn on the player, lie to the player if they were honest in the past, nor could an NPC steal an item from the player, etc. Obviously, this is good as a general rule, but it's the kind of rule that begs for exceptions, so I won’t ask you to completely scrap the quest and start with a different premise.
• However, I feel that your quest doesn’t really give the player a good opportunity to see through Tuls’ lie and confront him on it. If I take his initial dialogue at face value, I don’t really have any reason to not believe what he’s saying. Sure, he tells me to not read the letter, but I feel like it’s not really that weird that he would ask you to not read the love poem that he wrote for his beloved - that’s just asking to respect basic privacy.
  • To tie into this, I don’t know if you’ve intentionally made the latest rumors appear only after you start the quest, but this is a really weird design. Latest rumors in Morrowind simply don’t work like that - they are supposed to direct you to quests (or points of interest) before you start them. An average player that would play your quest would probably immediately go talk to Nendryl and would have no chance to encounter the latest rumors.
  • I understand the intention is that the player should get the information that Tuls is shady from the other NPCs, but honestly I think that approach doesn’t really work.
• So I would suggest that you’d make his initial dialogue sound much more shady. Maybe make him slip-up, maybe have him explicitly ask you that you shouldn’t tell Nendryl that the letter is from him, and that it’s from House Hlaalu instead... There’s multiple options to improve the dialogue here, but the key point is that the player should be instantly suspicious of him. Hell, you could just have the journal entry lampshade the fact that Tuls asked you to not open the letter, or that he asked you to lie to Nendryl.
• I also think that there should be an option to confront Tuls if you read the letter before talking to Nendryl. Ideally, you would script the letter so that it casts some harmful effect on the player and adds a journal update. Then, after you talk to Tuls and tell him about it, either have Tuls attack the player immediately, or have him offer the player a better reward if they go along with the plan.
• In addition, you could also use the letter script to add a seal to the letter that the player would have to break to read the letter, so that the player has an opportunity to think about their choice twice.
• If the player chooses to go along with Tuls’ plan, you really shouldn’t have him attack the player at the end of the quest. This, in addition to him lying to you at the start of the quest, is way too much. Don’t punish the player for choosing the “evil” path.
• You should also have Nendryl or Belu give the player some sort of reward if they stick to the “good” path and confront Tuls without Belu.
• Your quest is also going to break immediately once players start murdering the quest NPCs out of sequence. There need to be safeguards in place in case Tuls or Nendryl die early so that the players aren’t stuck forever with an unfinishable quest in their journals.

• Journal entries should be written in the past simple tense. Most of yours are in past perfect.
• Your journal entries contain a lot of what we call “editorializing”, meaning they directly tell the player what to do next (e.g. “It's better to return to Tuls to ask him what happened.”). This should almost never be the case. Instead, this information should be communicated through dialogue.
• Every time you add a new dialogue topic, you should have at least one journal entry that contains it so that the player can quickly access the dialogue history from their journal. So, like, the journal entry 10 should contain the words “big favor” somewhere, and so on.

• Similar to journal entries, dialogue lines for a quest topic should also be sorted by journal index, but in descending order. When selecting what dialogue line to display, the game checks all of the dialogue lines for the specific topic from top to bottom and displays the first line that passes all of the filtering. Your filters are actually set-up well, meaning that the fact you did the other way around won’t cause any dialogue issues, but you should still order them in descending order. 
• You tend to overuse “Goodbye” in dialogues. This feels kinda jarring - Goodbye should be used sparingly, i.e. when the NPC initiates combat with the player.
  • The one time that you should have definitely used a Goodbye is when the player gives Nendryl the letter and she dies, but you didn’t use it there.
• If you’re adding dialogue lines that aren’t filtered to a specific NPC, it’s not enough to filter them to a cell. You also need to add a filter to exclude NPCs with the T_Local_NoLore variable, and a filter for the proper TR_Map variable (in your case =0).
• If you’re using the “Dead” dialogue filter, you should filter for >= 1 instead of = 1. This can help to avoid issues for players that update their TR version midgame (in cases where they would kill one copy of the quest NPC before the update and one copy after the update), or for players that mess with the console.

big favor

• What is the intention between filtering out the dialogue for journal entries 50 and 60 if the player doesn’t have the letter in their inventory? What’s the expected outcome if they don’t have it?
• Is the ModDisposition 100 command in the dialogue line for journal entry 60 intentional? I assume it should be -100, but either way, it’s not really necessary.

latest rumors

• Like I already mentioned above, the way you’ve used the latest rumors isn’t in line how they are used across TR, and Morrowind in general.
• Regarding their content - if you want to surprise players with a twist that Tuls is trying to kill Nendryl,  the rumors probably shouldn’t completely spoil it. They should just hint at the fact that Tuls is a kinda shady guy.
• Also the rumors should be filtered out once you complete the quest, and not override all of the other Vivec rumors (use the Random100 global variable here, check how the other Vivec rumors are set-up).

Tuls letter

• The title of the topic is not chosen well. You have to imagine that the topic is an abstraction of what your character is saying to the NPC, and in this case you have to imagine it would look something like this:
  • Player character: “something something Tuls’ letter”
  • Nendryl: “A letter for me, huh? Can you tell me who it's from?”
• So, a better title would be, let’s say, “deliver a letter”, or something like that.
• Like I already mentioned, there should be a Goodbye command once you give Nendryl the letter and she dies. However, in general, the way this is executed is fairly confusing to the player - she just takes the letter from you, thanks you, and then she falls to the ground without a peep.
  • First of all, there should be some dialogue where Nendryl would, like, open the letter and cry out in pain, or something. There should also be some visual effect that plays after you exit the dialogue, similar to the visual effect that plays when Spriggans resurrect. In Tamriel Data, we have a couple of these effects premade (search for T_Glb_Var in the Activator category). And finally, it would be much better if the journal update is triggered outside of dialogue just after Nendryl dies, not immediately during dialogue. You will have to utilize NPC scripts for this.
• How would the player character know that he should tell Nendryl that the letter is from House Hlaalu?
• Nitpicking, but the title of the topic is missing an apostrophe.

Tuls

This topic is just kind of weird.

• The same issue that I mentioned for the latest rumors applies here. Players that would play the quest without meta knowledge simply wouldn’t have the opportunity to see these dialogue lines in game.
• Also, as a player, if I actually ran into this dialogue, I would expect that I can go back to the questgiver and confront him about it. This ties into what I already said about the letter in the quest flow section.
• Similarly, why should I even get the option to talk to Nendryl about Tuls before I talk to her about the letter? It just doesn’t make much sense to me.

I would reconsider if you actually need this topic at all. As I already mentioned before, I believe there are better ways to warn the player that Tuls is a shady character that doesn't involve talking to random NPCs in a situation where it just wouldn’t occur to the players.

Greeting 1

• Quest related greetings should be categorized under Greeting 5, unless the greetings in question are critical to the progression of your quest.
• The first greeting is missing addTopic “big favor”.

First of all, I suggest that you take a look at our Writing and DIalogue Guidelines, which include a lot of useful tips on how to make your dialogue sound close to vanilla Morrowind.

The main thing that you should pay attention to is comma splicing, which is an issue that we encounter frequently in showcases and yours is no exception. As an example:

Have you given the letter to Nendryl? Please give it to her as soon as you can, my heart is burning! And don't read it please, it's important that no one beside Nendryl knows the words erupting from my soul. -> Have you given the letter to Nendryl? Please give it to her as soon as you can. My heart is burning! But don't read it, please -- it's important that no one beside Nendryl knows the words erupting from my soul.

However, there’s also quite a bit of errors and non-standard word choices that I think you should catch on a second dialogue pass. When I write dialogue, I tend to give it some time before revisiting and actually implementing it in game. These basic errors that you overlook on the first pass usually jump at you immediately.

These are some of the most apparent issues I noticed:

• Dunmer should be capitalized, same with Ordinator
• He explained that Tuls' unrequited love for her had driven him mad, and he started to persecute her. - Nendryl is a woman, and persecute isn’t really the right word to use here
• Balu confronted Tuls, which admitted his mischiefs and tried to kill us both. - should be “who admitted”, also mischiefs is probably not the best word to use here considering, well, he tried to kill her.
• Please take the letter and bring it to Nendryl, in the St. Olms canton - She’s actually in the St. Delyn canton
• Is the n'wah that tried to keep me away from Nendryl. - Should be “He’s the n’wah”
• I don't want to think about that events anymore.

There’s more issues than these, but like I already said, the design of the quest will need a lot of changes including dialogue, so there isn’t much point in nitpicking the dialogue right now. But in general, please: don’t rush when writing dialogue, take your time, and proofread everything multiple times.

• All NPCs should carry a bit of gold, and a weapon unless there’s a good reason why they shouldn’t have it (Nendryl doesn’t have one)
• “Balu the Ordinator” is very silly. Just give him a standard family name, please.
• Tuls also should have a family name. It’s fairly rare that Dunmer that live in major cities don’t have one.
• Not sure why Tuls is a member of the Thieves Guild, since it doesn’t factor into the quest at all. He should probably just be factionless.
• Glass Dagger is a too expensive weapon for a level 8 commoner to have. Give Tuls something else (maybe an enchanted iron/steel dagger to stick with the enchanting theme?)
• Tuls and Nendryl have the Corpses Persist flag checked. This means that their bodies will never despawn once you kill them. I assume that’s not intended?
• Nendryl is wearing robes that are usually associated with Temple members. Give her a different outfit, please.
• All item IDs should follow the TR naming scheme as well. The ID of the letter is missing the map number.
• If you escort Balu to Tuls and kill him, Balu just spends the rest of his life wandering the St. Olms Waistworks. He should either return to his post at St. Delyn Plaza, or even better, just be disabled for the rest of the game once you leave.

So all and all, the showcase has a lot of issues. Unfortunately, you’ve chosen a theme for your quest that’s very hard to execute well, despite it might not have seemed that way at first. But there’s a reason why the no-betrayals rule exists, and I hope that the reason is apparent now - it’s just difficult to write around them in a way that would be satisfying to the players. What usually happens is either you don’t telegraph the betrayal well enough and players just feel upset that they had no opportunity to uncover it, or prevent it early, or you telegraph it too much and the twist falls flat on its face. You seemed to have understood this, but have chosen to address it in ways that I don’t really think work.

Like I already said, I won’t ask you to scrap the quest altogether and start over, but as you can see, there’s a lot of work to be done, and to be frank, I expect that it will take us more than one additional iteration to pass the showcase.

I highly suggest that you join us on our Discord and ask any questions you might have in the #showcase-shadowgate channel.