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Quite late in the game (party level 23) I was walking from trynton to Umpani basecamp. On the Arnika-Trynton road where you normally encounter lvl 10 creatures all my encounters were suddenly around lvl 4!
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Happened often to me.
Not as soon as you exceed the cap for that area, but when you're far behind.
I got the level 4 Sige + 3 level 4 bandits group regulary on the route between the T'rang teleporter house and Arnika, once i was level > 20.