I don't think there is a point in trying to use NMM mod installer for this. There is a description in the readme on how to handle the bsa in your ini-file, unless new tools have arrived that I'm unaware of, I think you still have to register your bsa manually, following the description.
I am of course using the genuin Morrowind, and the folder system is different for Steam. I think you probably will find your game in through a folder path like this: Programfiles->Steam->SteamApps->Common->Morrowind but I don't know this for sure.
I don't know how usual it is to run Morrowind on Steam nowadays; your question is new to me, and probably the majority of people still are playing Morrowind with a disc. If no-one here can answer your question, I think that Bethesda's Morrowind mods forum is probably the best place to get help: forums.bethsoft.com/forum/12-morrowind-mods/ . The modding community is still quite active there, and very helpful. In fact, I decided to make a thread there, myself, so that I can get advice that I can re-post here. My thread: forums.bethsoft.com/topic/1513324-children-of-morrowind-on-steam-version/
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