Some examples:
Girl who did poorly in first part of a compulsory level but was starting to catch up at the end. So, at the beginning, was next to last in every meet, every event. End of season, was around 6-8th in all events and all around. Repeated the level because they wanted her to be confident and "taste success." She killed it the next season and rode that high for several years.
Girl had a rough level 5, tried to move to 6 but struggled because she already had a hard time with 5. Lots of fear issues. Then injuries as she tried to catch up. Tried to work through it for probably a few years but finally quit. I wonder if she wouldn't have been ok if she'd repeated 4 instead of pushing for 5 and then 6.
Girl had a rough level 8, but improved enough in the season to be successful by Regionals. Wasn't totally ready for 9 and dealing with fear issues. Moved up anyway. Huge hits to confidence and injuries due to mistakes made from fear. Almost quit. Changed gyms. Repeated 9. Had to keep working on the confidence and fear. It did get better, but I wouldn't be surprised if it doesn't take a while to sort out.
Girl who had a decent level 8 but showed confidence issues. Did ok, but not up to what she expected of herself. Had coaching conflicts. Had most of level 9 skills, but not all. Repeated 8 because she was only 11 or 12. Killed it. Was set and ready by the time she headed to level 9.
None of them seemed more than disappointed to be repeating but quickly adjusted - but then again these are different gyms, but each time, it didn't mean changing groups. The formats meant that a large mixed level group had different configurations at different times. So it was ok. But I would ALWAYS put confidence and ability over the social side. One of those is a bummer, and the other can be dangerous or eventually end in quitting (due to fear or regression or injury or any number of related issues).
I'm sure there are more examples if I took the time.. but my conclusion is that if it's due to confidence or fear, definitely hold off. Those things don't seem to get better with pushing for the next level.. they pop back up even when you think you've got them beaten. Over, and over, and over again. Take the time early. Fix it before it becomes a real problem.
If they are just a skill or two off (or an event off), confident, but just not 100%.. if the coach believes they can get them to 100% by the end of the season. If the kid wants to move up. Don't hold them back.
But don't make a decision for social reasons. They aren't there for the social side, though socializiation is a plus. Social perks are the sprinkles on the top that make it more fun <3