That was also Morrowind. I believe they said it happened when the console was running low on memory, they would just reboot when you transition between areas. You would get the dreaded 'long loading screen' which was the console rebooting in disguise.

You could set an image to display while the console rebooted, so they put up a loading screen and rebooted the console. When the console rebooted, the game knew it was in a "loading" screen, and picked up from there.