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The section from the core rules regarding leveling up says

Your total XP earned determines your level, with every 3 XP allowing you to advance to the next level. Your level is used to determine your maximum attribute score as well as to provide a general indication of your power compared to other characters and enemy or ally NPCs. The Player Character Level Advancement table details the XP requirements and maximum attribute score for each level.

However, the next section about Feats and Attribute Points says

For every XP that you earn, you also gain 1 feat point and 3 attribute points. These can be spent immediately or saved for later. You gain these points every time you are awarded XP, not just when you level up.

There is no mention about benefit from leveling up, other than "determine your maximum attribute score", which is also only increases every two levels. XP immediately increases your feat point and attribute points, and it seems level is only a milestone, which only mechanically makes a difference every two levels.

What is the significance of leveling up in Open Legend? Is unlocking attribute cap the only mechanical benefit?

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Levels are used not only for attribute caps, but as a general indicator of how strong the player characters are

While you are correct, in that Open Legend mechanically only confers higher attribute caps at higher levels, it's highly suggested throughout the rulebook that a game master should use level as a general power and renown indicator for the PCs. For example, in regards to Wealth Level:

...You can use [the Wealth Overview] table as a rough guideline for when to give players more wealth, particularly if you have also created an outline of milestones for granting experience levels. For example, the table shows that by 4th level, a typical character should have progressed to wealth score 4. Using the experience level milestone plan detailed previously, we could decide that after stopping the first threat to Woodshold, the people of the town take up a collection to reward the heroes. We can also plan to give the Cult of the Dragon a horde of treasure that will again increase the party’s wealth score. (Chapter 8: Running the Game)

Additionally, because XP is directly linked to level, it is a good indicator for what the PCs are ready for. The ENCOUNTER DIFFICULTY, NPC SIMPLE BUILD, and BOSS NPCs tables, also in Chapter 8, list stats that are appropriate for PCs of specific levels to be paired with or go up against, and can be used as a decent baseline.

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