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We study recombination processes in nitride LEDs emitting from 270 to 540 nm with EQE ranging from 4% to 70%. We found a significant correlation between the LEDs’ electro-optical properties and the degree of nanomaterial disorder (DND) in quantum wells (QWs) and heterointerfaces. DND depends on the nanoarrangement of domain structure, random alloy fluctuations, and the presence of local regions with disrupted alloy stoichiometry. The decrease in EQE values is attributed to increased DND and excited defect (ED) concentrations, which can exceed those of Shockley–Read–Hall defects. We identify two mechanisms of interaction between EDs and charge carriers that lead to a narrowing or broadening of electroluminescence spectra and increase or decrease EQE, respectively. Both mechanisms involve multiphonon carrier capture and ionization, impacting EQE reduction and efficiency droop. The losses caused by these mechanisms directly affect EQE dependencies on current density and the maximum EQE values for LEDs, regardless of the emission wavelength. Another manifestation of these mechanisms is the reversibility of LED degradation. Recombination processes vary depending on whether QWs are within or outside the space charge region of the p-n junction.