@Gazz: I'd still like an answer to my question. What is the advantage to this distribution over one that separates tiers AND provides more variance at the high end?
although I am not gazz, I am pretty sure that it is to give a weapon a character.
Just because you have gamestage 500 and 5 points in lucky looter should not mean you fin that super op weapon.
You find a lot of better weapons, but not each and every one.
As I've said before:
My trusty boomstick with max dmg that I found when I was lvl 5 has become a sort of... legendary on its own.
When I found a T6 that was better... I was kinda sad... but the completionist in me knew it was time to let my boomstick go for an allround better weapon.
And to answer your question with less personal opinion and more gamedesign in mind:
It is to simulate a world. You aren't in a computer game where everything is bound by levels.
Also it means that you aren't garantueed a great weapon, just because you skilled it to the max.
And if crafting wasnt a thing the "hidden level" would also be a great way to do it, but because crafting works with levels, levels are necessary... to keep it from beeing so stale as it was in A17 this overlapping range gives a bit of flavour to this otherwise static mechanic.
Remember A17? Once you got a better tier, you threw the old one away. And you want that back? :-?
It was one of the bigger complaints of that alpha (with the removal of gunparts and the dumbing down), and all your proposal would do is go back to A17 but instead of scrapping all weapons of same and lower levels instantly, you only scrap lower levels instantly and you still have to compare stats.
As I see it, there is no negative effect of this system that would be outweighed by the amount of "engagement" it produces for the player.
Its more on the personal opinion side... but objectively (from a gamedev standpoint) it is not a bad design in any way.