@Utopolyst: I tried to recreate the issue as I understood it, and was unable to.
As you described, changes to Lydia's base form in the USKP were not being overridden by the later-loading ESP from your Lydia mod because the USKP has a BSA. This wasn't to do with loose files vs. BSAs; this is already understood.
So what I did was create two tiny test ESPs.
In the first, I renamed Lydia to Lydia Loads-Later and called it Lydia Loads-Later.esp.
In the second, I renamed Lydia to Lydia Loads-Earlier and called it Lydia Loads-Earlier.esp; also made a change to an object pointing it to a new mesh in a new folder, and made a BSA with that mesh folder with the same name Lydia Loads-Earlier.bsa, so it would force the BSA to load.
The error did not occur. With Lydia Loads-Earlier.esp loading first, Lydia's name correctly showed as "Lydia Loads-Later". The ESP with a BSA was not jumping the load order over the ESP without a BSA. If I used the launcher to move Lydia Loads-Earlier.esp down so it loaded after Lydia Loads-Later.esp, then Lydia's name showed as "Lydia Loads-Earlier". Again, 100% correct.
So, you may be right that there's a bug with the overriding, but I'm unable to determine it. Kinda happy about this as I need to change hundreds of NPCs.
