To begin with, I know this idea is more suited for MOD than game suggestion.
Anyhow, it's not hard to agree that level 1-4 characters surviving in an environment full of Mindflayers, Red Dragons, Hell, Underdark, not to mention a level 1 archmage NPC, level 5 archdruid... (ridiculous is the only description I can give)
For the sake of (lore) coherence alone, the starting levels should be way higher (or given a choice for player), along with adjusting monster levels to be more "realistic".
The way I see it is the beginning of the game will be filled with NPC/monsters with lower levels (from the bandits to the goblin and gnolls encounters) then their levels would increase to match the player's level (hag and Gith patrol etc.)
I think characters in this setting should start at around 5 or so, it would make the most sense. 10 is a bit of a stretch and very powerful and leaves little room for growth in the entirety of the game since in no way would it make sense if you were a level 20 god by the end.
I do agree 100% that it makes no sense that you start out as a level 1 adventurer in this very dangerous setting unless they tweaked the difficulty and story to make it more of the first act a survival game sort of like fort joy. In that case it could make sense that you were a level 1 adventurer and were avoiding fights for as long as you could until you got more training and gathered more relics and powerful artifacts to aid you.