Nice job on the document, very organized. One thing I noticed is that you don't have to touch Shader Editor at all, you can just press Rebuild All Materials on the root object or Rebuild Material on individual objects.
So the root cause is not normalized bone weights, i.e. total sum of all bone weights per vertex exceeds 1.0 in your model. You can fix that by pressing Weights - Normalize All while in Weight Paint mode:
However, that made exported model crash on load, so I had to fix it. Please download version 3.10.1 of KotorBlender from DeadlyStream.
Here is your fixed model in-game: