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A point of interest, in the two videos you linked one version is the PC version and the other is the Xbox version. The Xbox version shows Nihilus have a proper fade away while the PC one you showed has a jank one. You mentioned TSLRCM, but the PC version gameplay you showed is from a playthrough not using TSLRCM, judging by other parts the uploader showed of that playthrough on their channel. Maybe TSLRCM fixed this issue on PC? Not sure. Fun fact, the Switch version from what I saw from 2 playthoughs on Youtube also has a broken fade effect for Nihilus. I think the Xbox version is just more refined in many areas compared to the PC version, considering it's an old 2004 game. I saw a TSLRCM playthrough with fixed fades, maybe the mod fixed it for good? ngl the fade out effect is kinda wonky in my experience in both Kotor 1 and 2. It sometimes works and sometimes doesn't. Mods using "ghosts" like Brotherhood of Shadow or even vanilla characters like Ajunta Pall in or the TSL Korriban tomb visions all are supposed utilize fade aways upon death, but sometimes this works and sometimes this doesn't. I don't know much about scripting but my game settings are as max as max can be and my PC components aren't the issue, Kotor loves Nvidia. When it comes to fading in this game engine, I think it might be you and your luck if the engine wants to cooperate with the script that actually allows it. Sometimes there might just be too much happening in the engine for it to register correctly. I'm hardly an expert on this though, this is just what I'm assuming from multiple inconsistent playthroughs.

There's a very likely chance that the OP is very un-knowledgeable about in modding in general judging by this quote from their Mod Request thread. I would advise to assume novice level here.