If I understand this properly, there are no actual Morrowind resources or assets used in this mod, and the only thing from Morrowind included is the storyline.
If this is so, then Why do we need to own Morrowind to play this mod?
If all that this mod needs from morrowind is story/lore then ownership of Morrowind is superfluous because no other mod that uses past story and lore as part of it's makeup requires additional game ownership beyond Oblivion.
It's just a question mind! I'm not trying to cause trouble or anything!

There seems to have been a
There seems to have been a misunderstanding.
Morroblivion is at its very heart a conversion\port of TES3 content over to the TES4 game engine. It is not a remake like SOVVm, Silgrad Tower, Vvardenfell Recreated etc. Morroblivion does make extensive use of (modified) Morrowind resources, including meshes, textures, sound, video and text.
As such it is essential for you to own TES3:Morrowind before you are allowed to legally play Morroblivion.