So it doesn't actually un-equip things that don't meet the level requirement?
You mean items that are unequipped when state effect is applied?
Well as I see it in my imagination, both your scripts, (Level Requirements and Level Down) enables cool features, first makes actors unable to wear stuff, if they are below required level, and second adds new state effect which reduces actors level, making it a lot weaker. In theory, if someone has both your scripts, then in battle facing opponent while having Level Down state applied, actor shouldn't be able to use equipped items that are over its level. The same way as you can't lift car without muscles and propper workout. So I assume, yes, as long as state effect is active actor can't get any benefit from "unequipped" items, as if actor was "barely naked", but can equip different items. After state effects is removed, items are reequipped. But I don't know if its easy for game system to remember originally equipped items, cause it also need to swap back items used instead of unequipped.