Give the mod a higher priority and look if it is necessary to merge scripts. It seems, like you've already got a mod installed, that changes the armor set.
According to the Next-Gen Patch Changelog 1.32 vs 4.04, only the "dlc1_item_extensions.xml" was change among the XML of the DLC1. So I confirm it's compatible to both Classic 1.32 and Next Gen 4.04.
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I downloaded it, installed it but it doesn't work! The merchant's Temerian Equipment remains "Light Armor"! Do I have to do anything more?
So I confirm it's compatible to both Classic 1.32 and Next Gen 4.04.