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Since when has that been in effect? First time I've ever heard of such a penalty. To my knowledge, using lower-level equipment just meant that it didn't provide the obvious numbers that equipment your level would.
To be precise. Since one tamriel, stuff doesn't have stats. Instead the stats of an item are determined by the difference between your level and the equipment level.
Let's take the example of a one handed sword. A 1H sword with a white rarity has a damage of 1037.
If you are lv 10 and the sword is lv 10, the sword will be 1037. If you are lv 50 and the sword is lv 50, it will be 1037. Same with cp160 and a sword cp 160, 1037, and so on.
Now if you sword has a lower level, it's damage will get reduced each 2 levels of difference (10 cp difference for champion points when lv 50).
So if you're lv 45 using a lv 30 sword, that sword will be about 870 instead of 1037.
Weird, I never noticed such a thing. I don't remember it being in the potes, either.
Turns out it was one of those "undocumented" changes, too. Ah well!
That being the case, then, it makes even more sense now to upgrade your equipment every 5 to 10 levels, depending on your available resources and how badly you want to keep your edge; although at that kind of level the difference wouldn't be too crippling.
Also, you need to remember that every item, enchant, set etc. works that way. While if it's just one item it's not a big deal, if your entire stuff is underleveled you'll suffer some penalties, especially with enchants regarding resources and their regen.
To help with that they made a "equipment bonus" meter, when you open the character sheet (with all your stats), you'll on the top of the window 4 stars. If you're at 4 stars, you've got all your stuff on level, then it starts to decrease when you don't have some parts not up to date. It also tells you the worst piece of equipment you have in your gear.