I've been preparing a known issues list, because I want to get an official MDLedit update out as soon as possible. Posting it here in case there is something I missed.
1. MDLedit is not capable of processing some very large models (eg. the K1 DS endgame scene area models). I may be able to solve this in the future.
2. When converting area models from K1 to K2, some models lack an aabb node in the MDL. Without the aabb node, the model will not be displayed in the game (unless the VIS file is missing, but this shouldn't be the solution). In this case, first decompile the model to ASCII, then edit the file with a text editor and add the following lines in an appropriate place:
node aabb NEW_AABB
parent BASE_NAME
endnode
3. There have been reports of smoothing not working properly if the model was converted with the batch convert function. I haven't been able to reproduce the issue so far and would be grateful if I could receive all the relevant files to examine them if it happens to you.
4. In some area models, the aabb mesh isn't properly modeled to be used for the creation of the walkmesh, which causes the compilation to fail. If that happens you have two options. You can either inspect the aabb mesh and delete all the offending faces or you can enable the 'Export WOK file' option in MDLedit, then use that mesh to replace the aabb mesh, just make sure it has all the right options afterwards. In the future, I will add an option for the WOK file to be handeled separately, so this issue won't arise anymore.
5. Smoothing will sometimes not work across boundaries where the UV is mapped in different directions. This requires an update to the vertex normal calculation and will hopefully be solved in the future.