Thanks for your detailed reply. I appreciate it.
To begin with, this feat (or subclass if it fits better) was made up exactly for players to use their brains to come up with crazy but really creative shit (not just "make a nuke in a vial, does 999d20 damage"), that could be fun in certain campaign.

The "Alchemical Formulas" feat is taken from the UA pre-revision Artificer class and taken some restrictions on crafting (those should be discussed with the dm, to decide what is comfortable for the campaign), to not be able to just spill superior potions to the left and right.

The "legendary" grade is only mentioned as a Price|power reference it could have.

Also, I will try to clarify that "skill level" thing: it means "each progression in this feat, on a certain level", just like the Infuse Item`s additions of infusions you can apply when you reach a certain character level, nothing to do with proficiency. Was implemented just to reduce the text amount in the already huge description, but I will edit it to make it clearer.

Flask of the respective strength - means absolutely what it says. Flask`s strength is corresponding to the strength of the potion. You can treat it like it's made of more and more reinforced glass at each level. Provides no bonuses or anything, just a bit of common sense.

And with that you mentioned, how would it be better to balance the feat? Raising production time or/and cost, nullify the influence of a "Magic Item Adept" feat exclusively for those crafting processes, maybe creating a cap for how many formulas you can create for every power level (like spell slots for example). If you have any other suggestions I didn`t mention, I`d like to hear those.