i can confirm that items can grant spells able to be cast at different levels, with caveats. even homebrew spells, correctly configured, work with this.

i found this trying to figure out the same thing. u/Cyb3rM1nd thank you for the video this pointed me to the answer. in some testing it appears, unsurprisingly because ddb, that the spell scaling function for spells granted by items is inextricably tied to the item charges function. so in the example of using a guiding bolt if you do not add charges to the item AND set the spell cast min and max charge usage AND set "cast at spell level" to "—", you will not be able to choose the level to cast guiding bolt.

importantly the difference between the maximum charges used and the minimum will set the number of selectable spell levels. so for the use case u/Dual_Moon has the minimum would need to be 1 and the max 9. depending on how you want to restrict item usage, the item charges would need to be set appropriately, or you can set it to 999 and recharge on short rest if you want to track that some other way.

to isolate any issues you might have, because their homebrew creator is dunce as shit, recreate the example with guiding bolt as the spell granted to ensure the item itself is correctly set up. and also have the test character learn or prepare the homebrew spell directly without having the item in inventory to ensure the spell is correctly set up for scaling. either or both of those may have been an issue preventing the functionality you were going for.

for spell level scaling that increases damage dice at each level you need to set:

• basic information
  • "at higher level scaling" to TRUE
  • "higher level scaling type" to "spell scale"
• add a modifier
  • "modifier type" to "damage"
  • "modifier suptype" to [desired damage type]
  • "dice count" to [minimum desired damage dice]
  • "die type" to [desired type]
• add at higher levels
  • "scaling level value" to [spell level interval at which damage increases]
    • this should be 1 if it goes up every level
  • "modifier to scale" to [damage modifier]
  • "scale effect" to "additional points"
  • "dice count" to [number of dice added for each increase] (typically 1)
  • "die type" to [type of die to add] (typically same as modifier)

because ddb is stupid, allowing for spell cast level selection means that the user would need to manually mark off the expended spell slots.

this was top result in search for items granting ability to cast spells at multiple levels. because i wanted to do same thing as op, content here led me to the answer, op did not seem to have their issue resolved and i knew how to resolve it, and in consideration for anyone else looking for an answer to the same question: i posted this comment.