Figured it out, writing solution if somebody would face the same problem.
I opened the mesh in nifskope, lighting shader property had different values compared to upper part of the outfit, specifically it had different emissive color, emissive multiple and lighting effect1. I copied all values from the upper part and its all good now, glowing is gone. So check your mesh shader values in nifskope.
Original URL: https://www.loverslab.com/topic/116893-texture-glow-issues/?do=findComment&comment=2527810