At my son's old gym, the coach moved kids up way too early. He had some kids skip L4 and go straight to L5, and those kids did very poorly, and ended up repeating L5 (after attempting L6 at an out of state comp and getting 40AA). He had kids skip levels and they also did very poorly. He has a kid now who should repeat L5, but he is moving him up to L6 anyway. After seeing how my son did at L6, compared to his very good L5 year, I can see how repeating can be so good for kids and their foundation skills.
My son should repeat L6, but they want to give him till end of summer and then evaluate. Score-wise, he was on the cusp and he stayed the same score AA all season, but for different reasons at every meet (a fall on floor where he normally wouldn't fall, a missed swing on the PH when he normally wouldn't forget), so I think coaches are thinking that he might do better with a full year of training at this new gym, since apparently changing gyms can be tough for some gymnasts.