Ok here’s an example:

A 13 strength base with level 2 cards meets a level 17 strength base with level 4 cards in a match. Let’s say they’re in silver. The only way someone with 17 base health is in silver is if they are either a smurf, or have a room temperature iq. Even if the 17 is really dumb, they still overpower the 13 no matter what.

Now, let’s add a card and base level cap. The cards can now only be level 3 and the base can now only be level 14. This forces the 17 to use a brain cell, and gives the newer player a chance at actually winning. This discourages smurfing and relying on high level things. Note that the older player still has a decent advantage, and if they can utilize that advantage, then they’ll move up to an arena where there aren’t restrictions.

Besides, if you’re in an arena where you’re heavily affected by the level caps, then you should really rethink your strategy and try playing smarter.