Ashes is going to have an (even bigger) issue in the future with power creep.

A level 1 fighter has 68 total base stats, 13 physical power, and 36+20 armor+magic resist.

A level 25 naked fighter has 340 base stats total, 65 physical power, and 180+100 armor+magic resist. A 5x increase in stats, just for leveling, no gear.
Now, I have regular green equipment. I have level 10 shoulders and earrings, and I only have a 5/8 blood runner set bonus and a 5/8 medium set bonus:

I have 417 base stats (80% gained by leveling, 20% by gear), but I have 279 physical power (23% leveling, 77% gear) and 480+407 armor+magic resist (32% leveling, 68% gear). If I had a full 20 blue gear the percentage of stats coming from gear would be even more ludicrous, not to mention higher rarities and enchanting. So while the base stats come mostly from leveling, the waterfall stats provided by gear are way too high compared to the base stats gained from gear. Of course, these were the main stats I built for, and the other stats that I have not acquired will have way higher contributions from base stats.
PS: this is all post rarity nerfs.
EDIT (31st of January, 2025): With a bit more insight from the gearing system, I think the main issue at the moment is the power rating given by weapons, which increases damage done by a ridiculous amount. Right now I have 60 physical power naked (level 25). When I put all my gear except weapons, I get 190 physical power ( ~3.2x bigger. Pretty big difference already). When I introduce weapons (rare Dunzel greatsword, heroic Cindesinger) I go to 394 (2x bigger on weapons alone). This is such a huge power creep, that a guy that just reached level 20 (5 levels apart) will be one shot by me. If this trend continues, you won't be able to engage with any of the PVP systems (wars, caravans, sieges, open world PVP, etc etc) unless you're max level and geared out. This is essentially death for a game with long progression and that relies so much on unavoidable PvP.
Issue
1. The power creep design is too high at the moment and it will spin out of control in the future.
Reasoning
Every single power step (level, gear, enchanting, rarities) gives you a simple stats increase.
This makes it hard to balance. You have levels that give you power increases, then you have gear levels that give you power boosts, then you have gear rarities that give you more power boosts and extra stats on the gear, then you have set bonuses and rarity on set bonuses that give you more stats depending on the rarity of the gear in the set. On top of all that you have enchanting that increase every stat in the weapon. And this is only what we have currently. From guild buffs to social organization buffs and other buffs from other systems, the power creep will skyrocket.
Even if you do small numbers per step, there are so many steps that at the end of the day you will have a huge power creep.
We are already experiencing a small fraction of this power creep. A level 19 with regular gear will not dent the armor of a level 20, because the gear disparity between level 10 gear and level 20 gear is enormous. This will only get more out of hand when you add further systems, longer leveling, and higher max level.
Suggestion
I would suggest, aside from making the power steps smaller (leveling, gear steps), using a different type of itemization than just straight-up increasing damage mitigation or damage dealt. Take itemization in games like Baldur's Gate 3, DnD 5e, and Pathfinder. These games have power progression and you do get stronger as you level, but it doesn't always come straight from your items increasing your damage or defensive status, but added mechanics that can be used for your advantage.
An MMO that did this perk well was (believe it or not) New World. Here are some examples of good perks that can make gear stronger without just a direct increase of power or defense.

These types of perks can make creating a build more fun, reduce power creep, and add an element of skill by creating new mechanics that players need to adapt to and play around to optimize their gameplay. Legendary and artifacts could even have active skills that would be powerful but have a big cooldown (Ex: an artifact chest piece that gives you the ability to fly for 1 hour and a 24-hour cooldown or something like that) that could be very powerful but also situational and doesn't just give you free always on damage stats like a physical power increase.
Side note to the "its just an alpha crowd": I know the game is not currently balanced and this is one of the things that will change in the future, I'm not arguing that. I'm arguing that this design of itemization will either create a boring gear progression where gear upgrades almost don't matter, or it will create a gear progression where if you don't have the strongest gear and are at max level on the server, you will be useless in any type of content.
A different itemization design can make upgrading gear interesting while not completely breaking the balance of power progression.