MO option alone should not use ulgp (R02 doesn't, but I'll check R01 at later time), and ulgp should not have any issue with modded flevel.... But even so, a crash during that process should also not touch flevel. In case it does, I'm unclear where your backup was... from what you're saying, your main flevel and only backup was in data/field, the exact place where the game loads flevel from.-
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The backup issue is mentioned in the readme, it's designed to stop people running the installer twice and eliminating the first backup. For example, if using Reunion on a clean game, all files are backed up in the backup folder and are the clean versions. They stay there until you manually delete them. In order to make sure Reunion is backing up the current install, the folder has to be deleted beforehand. This can prove a real hassle... because installing twice can lead to issues with some mods. That's regardless of my mod, it's simply the nature of editing an already edited exe-flevel etc with newer versions. Reunion will restore all files from the backup folder before it begins the install process.
I don't think there is any better way of really doing this... the real issue here is that installing mods twice over the same files, and mixing mods together, can be a nightmare.
In this case you certainly needed a backup outside of ff7 root folder before installing. It's an easy and costly mistake to lose your files by forgetting.