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This Brotherhood Quest drives me a bit insane... It's about killing a guy and then going for his employer... the thing is... every time I do this quest, the employer is consistently in Privateer's Hold every single time. I wonder if this is a bug or something classic df did aswell?

The quest mentions that he should be in a human stronghold, the only 2 human strongholds in Daggerfall are Privateers Hold and Castle Daggerfall (which is probably automatically excluded, being a main quest dungeon).
So in Daggerfall region he'll always be placed in Privateers Hold.

Ahh, that makes much more sense now, thanks!

It just confused me... but in the end, it's kinda helpful... at this point, nearly everyone can navigate Privateers Hold blindfolded

What's surprising, is that such rich region has so few human stronghold. Same goes for Sentinel, but some smaller regions have more of those...

The only fallback mechanism in Daggerfall Unity, is that if no dungeon of requested type exists, then a random dungeon (of any type) is selected instead. But the case where very few dungeons match the required type (and, at the limit, only one exists) has no specific handling...