It's really kinda disappointing to hear that the overlevelling is still a problem - especially on consoles, due to the lack of mods. I am just coming back to the game after a long break (never even finished it, work got in the way, then other games) and had dearly hoped that my one big gripe - as a completionist and explorer, I was woefully overlevelled for too many new quests after a while, even new ones in just reached locations - had been addressed.
Hopefully, it will be, but if you need any more suggestions on how...
In short, area and quest and reward levels should adjust to the player's level, but the level adjustment should never be negative (lowering the area/quest level), only positive (adjusting a low level to the player's level to present appropriate challenges and rewards). Whatever you decide to do, no matter when, it should always be "relevant" and provide appropriate challenge and rewards.
Areas and Quests (both Main and Side) should have an available level range, that is determined by when you first enter the area or accept a quest.
The level should take into account both the developers' plan of progression, your character's level and the chosen difficulty.
Similarly, quest rewards, like gear and weapons, should also be raised to the newly determined quest level.
Most importantly, the level range for areas, sub-areas and quests should have a minimum level but NO maximum level.
How this would work:
Whenever you enter/discover a new area or accept a quest, its level will be determined by your character's current level - but not necessarily set TO your character's level.
Let's say you enter a new area at level 15. The area has a minimum level of 10 (set by the devs according to their plan of game progression, like it is). Since you exceed the area's level, a few adjustments will be made:
Everything in that area (free roam enemies, encounters, chest content) that has a level BELOW your own level will be raised to a higher level, depending on your difficulty, like (as a suggestion):
- Just the Story: Level adjusted to (Player level -1)
- Story and Sword: Player level
- Broken Bones: Player Level
- Death March: Player Level +1
The result would be, that no matter when you enter an area, the lowest enemies you can encounter would never be lower than the newly determined level to present a reasonable challenge (the difficulty modifications - weaker/stronger enemies, less/more damage - are not changed, after all). Similarly, if you found an unguarded chest, the contents would also never be below that level.
The areas in the Witcher 3, though, have many sub-areas of different levels, mostly higher - but those will NOT be adjusted downwards. If enemies are already higher than you are, if you're level is too low for something, it will stay that way until you level up. A level 17 enemy will still be level 17. A level 25 still 25. Only if your level is too high, will any change take place.
It would work in a similar way for quests and their rewards. When your level 15 Sword&Story character encounters/accepts/begins a quest that was level 10, it and its rewards will be raised to his own level, 15. But any quest with a level similar or above your current level will remain the way it is. But they're not locked in, until you accept/engage in them. That way, multiple stage, area-hopping quests will always remain relevant, and if you see a level 15 contract now, but don't accept it, then level up and return, it will turn into a level 16 or 17 or whatever contract once you do accept it.
To summarize:
Whenever you encounter something for the first time, you will never be too overlevelled - but you may very well be underlevelled.
In this way, completionists and explorers could take it all in, never having to worry about finding a "waste of time" side mission they are already over-levelled for but there would still be plenty of areas and quests and enemies they are woefully underlevelled for when they first encounter them.
And people only following the story missions could still do that according to the devs' plan of progression (i.e. minimum level requirements for the quests).
A system that adjusted the world around the player according to a minimum level range set by the devs and an maximum range determined by the player's level would accommodate every play style and always keep what you are doing relevant.