experienced it after being stuck in a bugged freeport for several hours where i could not die by any means or interact with items/animals.
I finally died randomly by a bug, then i was able to log into a freeport only once and saw that i had lost like 14 levels, after that i have only gotten to the create new character screen.
So it seems my character simply got corrupted by all those bugs.. should be easy enough to just let people create new characters and give them their lvl back.. but to ask people to start over after having spent hundreds of hours in game is just not fair.