@Wyrm
I didn't have a problem with the "magic system" being completely broken by this character. Max levels and magic categories could be just some limit that people put on themselves due to a limited comprehension of "magic".
Among almost all the comments I read I found yours to be almost in perfect line whith my thought.
I say "almost" because, while I completely agree with you for the passage above, ...
But it's true that, if magic if based on knowledge alone, Zeff's levels shouldn't have "reset" when he went back in time. His flawed knowledge of magic could have then made him cap out at "max level" before realizing later on that there was more room to grow, potentially without limit at all.
Instead, we have a case where someone went back in time, getting his magic reset in the process when his knowledge transferred with him. "Magic is knowledge" would mean that the reset makes no sense.
...I don't quite agree with this.
I mean, from my personal point of view I think that what the autor means with "Magic is knowledge" is that during the X000 years in the mental prison the villain guy acquired enough knowledge that let him unlock a new kind of power (or that let him create a new magic system, ecc.... depending of how we want to interpret what it is the power he is using).
It's this kind of new power/system that lets him demonstrate its current prowess, and not the knowledge itself.
So the fact that Zeff had to restart from level 1 could possibly be because in the magic system he (and everyone else) uses it's not enough have the knowledge, but you have to train your body & acquire exp killing monster to raise your level, build up mana, ecc...
This could not be applicable to the new power/system the villain is using.
And his could also be one the reason why the "magic scope" showed all the measurements as "unreadable": maybe that is a power/system in which the concepts of levels, mana, ecc.. are not applicable.
As a matter of fact "magic scope" isn't an almighty divine tools/spell granted to the MC by some gods that let the user see everything about everything; it's a simple spell invented by a human who only knows the current magic system. It's plausible that spell cannot display information about a different system.
Let's make an example: there are a tons of manga/novel in which magic can be performed not only using the mana stored inside your body, but also absorbing & using the magic power present in the nature/atmosphere.
Usually the latter way is much more efficient than the former (like putting in comparison the capacity of the whole sea & a bucket of water).
We could possibly think that Zeff (& everybody else) knows only how to use the mana stored inside their body (& possibly they use the "magic lanes" to achieve this, so that you can't use magic anymore when destroyed).
Maybe the new power the villain is using as simple as "use/absorb the mana in the atmosphere to perform magic" so that he doesn't have to rely on his already destroyed magic lanes.
This could possibly explain why he can achieve such amazing results using basic level magic (he wiped out the association hq using what seems to be an elementary grade magic): because the source of power is not the measly bit of mana stored inside but the massive magic power of the atmosphere.
So, in this example, "magic scope" possibly cannot display the amount of mana of the target, because he is using an external source.
And this could (maybe) be achieved with only mental training as you only have to theorize & understand how to access the external source of magic power without having to train your physique to do it.
This is only an example, but I think there could be a lot more possible reasons as to way he became this powerful, but Zeff didn't retain his past life prowess.