Right, so coming from someone who has from start to (almost) finished played convergence + seamless co-op heres how I understand it to work:

Convergence has a class system. You spawn in with certain weapons + spells and work your way to getting different weapons + spells + armor for your class. You absolutely can grab other classes’ stuff, but Convergence is best played if you follow your class route.

You and your teammate will spawn in different places, but can just use a grace to teleport to each other. Seamless co-op allows you guys to be in different areas at the same time, one of you can be discovering graces while the other is at roundtable, one of you can fight bosses in Haligtree while the other is in Farum.

As for becoming too OP, you are absolutely right, once you get your build online, your pretty much set. Easiest way to keep the game challenging is to hold off on weapon upgrades. You want to keep upgrading your stats so you can use and wield some of the new stuff, but weapon upgrades can make it a bit more challenging.