I've been thinking (this is purely speculation on my side by the way), but what if Azura turning the chimer into dunmer was only a part of her punishment for the murder of Nerevar?
Just changing the chimer into dunmer seems like a somewhat weak response to me so is it possible she already knew that Red Mountain was going to explode at some point, but rather than telling anyone about it her real punishment was NOT telling anyone and instead curse the chimer to fit their new identity in advance, but also ensuring that it wouldn't wipe them out.
I don't know if racial traits are a thing in the lore, but from a gameplay perspective having resistance towards fire would have been a big deal in surviving the hardships following the Red Year which I could imagine being a lot more fatal without fire resistance. And the identity of dunmer being all about survival and hardship seems to fit the landscape of morrowind post red year perfectly.
I feel like such a foreshadowed and ironic change of fate is exactly the kind of punishment I would imagine Azura do at her angriest, not just a physical change.
Thoughts on this? Could it be possible or is it too far fetched with how much time has passed between these two events etc.?