You are completely right. I dislike that the game essentially revolves around the player having to get into conflicts and quest hunting to level up. The game gives you options of how to play, but ultimately funnels you down a path of region level locking until you do xyz in a narrative.
There is balance to that tho, that I'll agree makes sense. But it would be nice to actually be rewarded with role playing who you want to be, and how you want to tackle missions. And if keeping your blades clean and the enemies fooled is the style you want to go. The game should reward you for it, rather than say, "cool moves...now go do what we scripted"