So just now I'm playing Morrowind, and one of those assassin assholes tries to kill me, so I kill him, and I take his stuff, and I sell his stuff, and as soon as I do the vendor puts on the assassin's helmet I just sold him. :P

Does that sort of thing happen a lot?

Yup. think it also happened in Oblivion.

[Edit: I should have read your post more carefully :P]
There is a major issue with Tribunal. The way the addons' questlines are integrated into the game is highly problematic because it breaks the game.
I don't know if you can do anything about it now that you've already been attacked but once you start a new game you should definitely install two mods.
You need one mod to fix the broken rumor topic and one mod to delay the assasins' attacks.
http://mw.modhistory.com/download-35-8080
http://www.nexusmods.com/morrowind/mods/40060/?

Regarding your question: Yeah that's normal. If you don't like it you should install either the mod fashionable merchants or use the Morrowind Code Patch.
Seriously: Use the Code Patch! It includes Bugfixes and it comes with great features that you can enable if you want. :)
I hope those mods are the right ones. I can't check which ones I have installed atm. :)
That's a very accurate description of Morrowind. :)
Well, today a modded Morrowind looks way better than (even modded) Oblivion imo. :)

NPCs "know" that they can die and so if you give or sell them equipment and weapons which are better than what they've currently got equipped, they'll equip it. It makes a kind of sense. If the world is dangerous and you have a Ring of Stop Stabbing Me, you'd want to wear it all the time.

If you want to get back what you've sold to them, you'll have to either kill them or sell/give them something even better. Better is a relative term - the guy in the fighter's guild in Balmora loves some Dwemer armor, which looks gorgeous but is utter crap, so he's easy to get stuff back from.

I don't know if you already read my answer from earlier. If you have then you might want to read it again because I edited it.
Regarding your question: Yes that happens a lot. If you don't like it then you should install the Morrowind Code Patch.
If you do like it you should still install the Morrowind Code Patch.
The Code Patch comes with bugfixes and performance improvements and has many additional features. The great thing is that you can apply only the changes that you like. :)

I read about those mods and I want the attack to come early. That set of armor you get is a cash windfall and makes getting really good stuff early on a breeze. As for the broken rumor, I know where I need to go and who to talk to regarding the attack so I'm good.

If you don't consider that endless supply of valuable armour cheating and you aren't bothered by constant attacks until you complete the add-on then I haven't said anything. :P
Regarding the rumour: The problem is that if you've got Bloodmoon installed there'll be no other rumours. Normally, you can get quests and interesting information by clicking on that rumor topic but in Bloodmoon this mechanic is completely broken. You really should install a mod to fix that. :)

I never thought of that. :P It may sound silly but when you put it that way that really is a shitty thing to do. XD I will install those mods just as soon as I get a chance this morning. Thanks Grapher. :D

At the end of morrowind the only armor I had on was a rare breastplate and enchanted clothes, If I remember right the less your carrying the faster you move.

Also the boots your wearing affect sneak I think which is cool. I was mostly running around in little enchanted slippers.

OpenMW. Works great and it's crossplatform: https://openmw.org/. :)

Of course, it can also be used with Steam version of Morrowind. This is independent of Steam, so it will work even if the data is copied somewhere else from the Steam's game directory and Steam is not running/installed.

That's why I made acrobatics one of my primary skills.

Just want to tell you that I've had a really long week, and that particular bit of tongue-in-cheek hit me as being really funny---made me laugh so hard I'm crying. Thanks, you just improved my day 100%!

:D
Now that the Bloodmoon and Tribunal quests already have initiated for you, I am not sure if the mods will work...
If that's the case you can also use the console to disable the assassins every time you get attacked.

Oh I'm restarting. I figured that was a given. I already deleted my saves. It's not a biggie, I was just starting to head north so I didn't lose much.

Have you tried the OSG build? In my experience it runs extremely well.
Also, the new fog shader someone on the forums created looks really amazing and for me already makes MGE XE almost redundant.
I hope we don't have to wait much longer for better mod support. :)
Okay. :)
Please consider giving Morrowind Code Patch a try as well. :)
http://www.nexusmods.com/morrowind/mods/19510/?tab=1&navtag=http%3A%2F%2Fwww.nexusmods.com%2Fmorrowind%2Fajax%2Fmoddescription%2F%3Fid%3D19510%26preview%3D&pUp=1