So, why would they put item levels in this game if the items we pick up scale to our character level. Example:
I'm lvl 5, and pick up a gun that is "Red" meaning I'm too low a level to use it. The required level on this weapon is lvl 12. I hold on to it until level 12.
By the time I'm lvl 12, all of the weapons I'm picking up do a lot more damage since they scale with my level, making this earlier weapon I picked up pointless.
What am I missing here?
In a game that is strictly linear where A -> B -> C in a straight line, then you don't need level scaling because the player's level and experience can be predicted by the devs and they can hand place items for you at specific points in the game and balance combat accordingly.
A game like Cyberpunk has a linear story but is freeroam, meaning you are free to do B -> A -> C or C -> B -> A to a limited degree. Main missions and side story arcs are of course sequential but you can do the arcs in different orders, do side or minor quest content before tackling main missions etc.
So the devs can't predict what level you will be when you do C. If there is no level scaling and they hand place loot, what that does is create an optimal path through the game and every other path is inefficient. It also creates scenarios where players know where all the good loot is by watching a youtube guide and go get that stuff first, which trivializes the rest of the game and break all combat encounters.
So in freeroam games where you can do quests in different orders, they scale loot to player level so that no quest order can be incorrect or inefficient. You won't be punished by doing Panam's main arc and side arc before Judy's.
The problem with level scaling is if you scale all the enemies and items to player level, nothing ever feels more or less difficult. You become like a car travelling on a freeway doing 120 kph. You don't feel the sensation of acceleration because all other objects around you are moving at the same speed. You only get that senstion of speed when accelerating to 120 kph and seeing all the stationary objects whiz past you.
Same with players and enemies in videogames. You don't feel the sense of growing power if all the enemies grow in power at the same rate as you. You only get that sensation when you outgrow enemies and roflstomp them when previously you struggled against them.
So Cyberpunk has a hybrid approach. It does level scale loot to your level but it also throws you loot that is slightly over or under levelled so you have something to look forward to equipping. It does scale enemies to player level but only within pre defined ranges so you can go to City Center and start a fight at level 10 but you will get destroyed because the Militech guys there have a minimum level of like 25. And if you manage to cheese them, they can sometimes drop loot you can't equip yet because you don't meet the minimum level.
This is to give the player the sensation that yeah, you can go anywhere and do anything in any order, but we are going to deliberately make some areas harder than others in certain level ranges to spice things up and give you problems to solve. But they won't be insurmountable problems.
If you pick up a level 12 weapon at level 5, it will have level 12 stats. So the stuff you pick up when you reach level 12 won't have better or worse base stats (although it may have different random attributes making one better than the other).
For the most part though, loot scales to your level when you get within a certain radius of it and when you save/load. There are some bugs that prevent item level scaling correctly. Many NCPD assault reward containers never scale loot so they are always green and have level 1 stats.
There is also a rather serious bug where if you leave unlooted corpses on the ground, the corpse loot permanently resets to level 1 if you save and reload. This will also downgrade the item's quality (colour) when the item level falls below a predefined minimum.
