First KotOR has 20 level cap, second - 50.
Sounds suspiciously low ... but maybe i remember it wrong, will check next time i will play.

About threat - you were abducted by cthulhu aliens, I think threat is dimension level 😁
Nah ...
They have nothing to do with Cthulhu ... maybe except the look.
This threat, as far as we can say out of EA so far ... is at best City-level ...
Maybe it will raise to State-level at best, but i dont expect anything too much abowe that.
it all can be fixed by having adjustment to difficulty level, like what level cap you want and difficulty of enemy encounters, experience multiplier, that sort of staff
Thats the problem ... it cant.
What you can adjust is level of your enemies, number of your enemies, equipment (spells and consumable included) of your enemies, AI of your enemies, ... stuff like that.
But you cant just change story, where the Absolute wants to take over the World ... to take over the City, just bcs you dont want end-level game.
And THAT are threat levels i was talking about.

I see its called tiers in DnD ... feel free to read here, if that interests you:
https://makeaskillcheck.com/5e-tiers-of-play/If not, the important part is this:
1st—Levels 1 to 4: Local Heroes
2nd—5 to 10: Heroes of the Realm
3rd—11 to 17: Masters of the Realm
4th—17 to 20: Masters of the World
And thats exactly it ... Larian originaly said that they want to have max level 10 ... a little later they changed that to "somewhere around 10" ...
Meaning we are in 2nd tier of threat ... Heroes of the Realm.
Meaning (as far as i understand it) that our party of heroes should be able to defend, or destroy some big city (like Baldur's Gate) ... but they are not strong enough to rule whole world, as they would be at end of next tier.
If Larian would let you level up to 20, we would reach power level, where we can challenge Gods themselves ... that is not something you can easily "change" in difficiulty settings.
