I've noticed an issue with NPCs in certain circumstances in Vvardenfell. When you are trespassing in a restricted area, non-hostile NPCs seem to be able to sense your presence even if you are hidden or cloaked as a Nightblade (I have not tested invisibility potions yet). As you are sneaking around, NPCs will react as if they have seen you, giving voice lines as if they spotted you, and playing through their "oh mercy me, what ever are you doing in my home" animations. They do not actually see you or generate a bounty when this happens, but crucially, they will sometimes turn directly towards you, which can result in you being removed from stealth and receiving a bounty if you are not quick to react.

This is especially evident while questing in the Sadrith Mora area, as a number of quests there require you to sneak through restricted areas. I would be approaching an NPC to blade-of-woe them, and they would spin on their heels to face me and deliver some line like "What are YOU doing here?" even though my HUD still shows me as hidden, or I am currently cloaked.

So far, I have only noticed this in Vvardenfell. I even did a spot check by trespassing in homes in a couple of different zones, and the NPCs there behaved as normal. I also tested it in a large trespassing zone on the western shores of Vvardenfell, and the hostile enemies there did not react to my presence in the same way while hidden or cloaked. Also, non-hostile NPCs in non-tresspassing areas of Vvardenfell (Vivec City, Balmora, etc) react normally as well. It seems to only happen with non-hostile NPCs in tresspassing circumstances in Vvardenfell.

A friend who has been questing with me experienced the same issues at the same time, but she did not perform the additional tests I did in other conditions. If I have time to test this more, I will update you. If anyone else is able to confirm this behavior, that would be helpful as well.