Its likely what we’d get would be a tool to create a normal mod. The tool checks for their requirements and when satisfied, rips oblivion files and repackages them.

So a clean skyrim installed to create the mod with the tool, but once the tool is done, you could remove the clean install and use it like any other mod.

This has been my experience with other “created from copyrighted works” overhauls, like rollercoaster tycoon for openrct2.