It's perfectly functional, you can't argue that.
That sounds also like a matter of opinion.

No, it's not. Functionality and usability can be objectively measured:
- Amount of mouse clicks to complete a task. The spell tree on the screenshot opens with a single mouse click.
- Travel distance for mouse cursor. This increases drastically if you have to move cursor back and forth.
- Time it takes to place the cursor on the object. The smaller the object, the longer it takes - surprise! In Solasta, I didn't have to constantly squint and aim on my 27'' monitor - everything is big enough to see and read clearly, but not too big to take away the precious screen space.
... and probably many other criteria that I have no idea about, because I don't specialise in UI / UX, but rather on the opposite side of things. Still, 25 years in software development did give me some basic understanding of it.
It seems to me chaotic, messy, unpolished, it took me a while before i finaly find out those spell level categories and they still can be easily oversighted in my eyes, every spell icon seem to be too flashy and sparkling i dont like that either, and worse part of all (again to me obviously) i have ben told that Solasta sort your spells as the game wants ... wich is something i would never be able to accept.
Basicaly this ... you would need to specify your question.

But if you do, please aim it to my PM ... this isnt topic about why Solasta created best UI ever, but about indication of spell levels on icons.

The game has a tutorial which explains all these concepts.
AFAIR, Solasta sorts spells alphabetically. I was also surprised when my spells shifted after a levelup, but considering how "often" it happens, this is not really an issue. Besides, it doesn't really matter to me because spell icons are sufficiently big and colourful to immediately spot the one I need. This is a stark contrast with BG3, where spell icons are just some glyphs and all have the same background.