So let me tell you about a little game called Paper Mario. The first two games are very beloved turn-based RPGs by Nintendo, major points of praise being its highly customizable progression system by way of 3 stats for level up and Badges as equippable abilities or stat tweaks similar to Materia in Final Fantasy VII, another very famous JRPG of the era. Alongside this were story based upgrades to your equipment, meeting new partner characters, and special moves akin to Limit Breaks unlocked every chapter milestone.
Now we fast forward to Paper Mario: Sticker Star on the 3DS. This game did away with a traditional level up system in favor of gaining health from collectables and scaling power by the use of stickers that served as your expendable resources to use their corresponding actions, with later areas increasing strength by giving stronger stickers in greater quantity. Motivations included encouraging resource management and averting issues with grinding being needed to catch up or outleveling the challenges.
The result: Sticker Star is THE worst received entry in that 6 game sub-series, with common criticisms including (as pertains to this level topic at least)
- Battles feel unsatisfying and bordering on a net negative (since you gain nothing permanent, only stickers/money to replace what you may expend fighting them).
- No sense of progression or build variety since the power curve is limited to the Stickers given in each area rather than being able to mix and match techniques
- Bosses becoming puzzles with solutions since without build differences in moves or statline, they either literally or figuratively require one approach to differentiate them from another fight's one approach. In Pokemon terms, imagine fighting something like Lt. Surge with a Mono Electric moveset and 3x your stats: if you use Ground, you can't lose, but anything else is hitting a steel wall with a twig.
And consider this is for an RPG with a single entity the devs can design the game progression around, rather than permutations of hundreds of creatures that could be swapped in and out of rotation on a whim.
And even putting that aside, Levels and stats have a clear point to game design because they make a simple short hand for how strong a character is: a character who joins at level 15 when your crew is level 6-8 conveys this person is much stronger in the story through the gameplay. A higher level indicates someone has played more with a character or build and is expected to understand it to a greater degree.
On the topic of levels not being tied to stats, how then do you meaningfully depict stat gain as a means of progressing a character that is immediately comprehensible to a player, if not through levels going, that does not introduce busy work that essentially becomes grinding by another name or homogenizes the experience?