Actually that does work exactly as intended apparently. Someone took data that showed that counter intuitively damage does go up as you level even if it looks like it goes down
The diminishing effects are apparently to maintain a consistent difficulty? I think
Damage goes up because you get better stuff, not because you level? Having 23 Int thanks to equipment of course helps with damage. Even tough the damage modificator is still negative.
Skills like Warfare and ranger anyway profit mostly from weapons and not stats.
Having Wits of 15 but only a initiative bonus of 2 makes the skill pretty pointless. Our archer has 17 wits and the same benefit.
