It's not like it doesn't work, but just it revert to the classic 1.32, especially on New Game Plus. Script Merger will think it's part of the mod those reverting 1.32 change. That is a bigger problem than conflict to another mod.
I recall one of the XML files your mod edits is to replace the redwolf scabbard to the wolf scabbard. If you already edits the redwolf scabbard, then you good to remove the XML files.
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EDIT: nevermind this mod doesn't cause that problem.
Script Merger will think it's part of the mod those reverting 1.32 change. That is a bigger problem than conflict to another mod.
Here the diff: XML 1.32 vs 4.0
There is a way to do this mod without any xmls. So I might just do that in the future if I get time for it.
If you already edits the redwolf scabbard, then you good to remove the XML files.