Pre-2.0 ONLY. Enemies are scaled to 3 levels above you, or they stay at their minimum level if that's higher. So all encounters should be High threat level or higher, never moderate or lower. (warning: VR tutorial with T-Bug can't be completed with this)
Scales up all lower leveled enemies to your level, AND minimum enemy levels are rebalanced, going up to 43 (instead of 32 in base game). See the map in the images section for details. Bug fixed in 1.9.1 (see changelog).