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He felt almost nothing that could be called sexual desire.
The motel was so rusty it could be mistaken for an abandoned house.
The first sentences sounds okay to me. I think the second sentence sounds wrong; it should be could have been. But I can't tell why. Is it because these are two different examples of could be? If so, what's the difference?
Note: Both are past-tense narrative.
Both examples strike me as grammatical but awkward. The first means
He felt nothing [then] that could be called sexual desire [if you experienced it now]
That makes some sense because the experience of emotion is presumably a human universal: Macbeth’s ambition presumably felt to him much as Putin’s ambition feels to him.
It is mildly awkward, however, because it shifts attention from the character being discussed to humanity at large. In my opinion, a better writer would have written “could have been called.”
The same grammatical analysis applies to the second example.
The motel was so rusty then [and remains so to this day] that it could be mistaken for an abandoned house.
Here the shift in temporal viewpoint is even less pertinent, and so “could have been mistaken” would clearly be better stylistically. Of course, the whole sentence is weird: abandoned houses do not look rusty.
