So this explanation wasn’t canon as of Morrowind as I recall.

So one mod, something like “Better Clothes” retextured the outfits and cleaned up some of the meshes.

It also added an entire system to “correct” the Argonian titties issue. Most merchants sold a “sewing kit” which would correct the mesh to switch to the flat model. All female Argonians had a dialogue option to adjust their clothing, in case a script had failed to fire.

(Oblivion has had mods which alter Khajiit breasts in… more “feline” ways…)