well the Level override just changes the level of the item, not the rarity
What did you change the level to? I think the item has to be level 16 to be Divine.
The first item type shift happens at level 9, and the second happens at 16.
I want to keep the item at my defined Level and have it as divine.
You can't. You should make the item Unique if you don't want to use the item progression system.