Depends a lot on the system. For example, 5e is a lot more forgiving for some disparity.
In the current game I run (13th Age) I allow new players and replacement characters to start at any level up to and including the party level, with the point that I will be advancing them faster and they will catch up in not a huge number of sessions. Some players enjoy playing their character through the lower levels and growing them up. Plus they get to see what works and what doesn't as they build. However, I don't have a group that's looking to swap out their characters often - they invest a lot in making their characters real and also I try to have interesting character arcs in addition to any campaign arcs going on.
Last two campaigns I ran before this (3.0 and 3.5) ran for a total of about 12 years, with individual XP and a good chunk of XP coming from RP and story awards. That system it wasn't as fun to be behind, and when we had character deaths (lose a level to come back) we ended up even more split. Eventually I modified individual XP to be "those behind got their individual XP to catch up, but if you were in front/tied for first you'd get plot bennies instead. But that gave different spotlight time and I wasn't to happy with that either. Again, that system it ended up impacting character fun to be behind.
As a player, some of my formative campaigns were big level splits, but this is back in AD&D and AD&D 2nd, which were more forgiving for it.
One DM had new characters come in at 1st and we had a lot of character death. At the end of a RL year there were only 2 original characters, who both just hit 5th level - a paladin of Sarogin (sp?) who was proposing a holy beer run, and my magic-user. (Yes, in a grindy world where magic-users had one spell a day plus d4 HPs, I managed to keep a wizard alive. I was rather proud. I threw a lot of darts.)
The other level-varying campaign was the opposite. I joined a game that had already been going on for a few years, and the main group of chartered adventurers (this was the FR) was subsidizing new adventuring groups, and we were one fo those. So we had a bunch of high level characters plus one 1st level, and we'd often get throw into repercussions of the high level group when we were not the level to deal with it. It was glorious. The DM I think ended up running multiple groups in different parts of the same world, so there was always things happening that weren't the focus of the current group, plus even group of players had several parties of adventurers depending on who could show up that week. So we eneded up with 4+ characters of all different levels and scattered around the Realms, and often would have crossovers and characters of very different levels going adventuring together.
To a non-level-specific system, that group of players had a good amount of overlap with a Champions superhero game where everyone had as many characters as they wanted (some heroes, some vigilantes, some villains), we were all over the map in terms of points though we all started fairly buff, and half the plots were caused or aided (or taken over) by players.
(Nothing quite like your eidetic memory techno super possessed by an elder horror that also gave her magical powers fighting the rest of the team in space when you KNEW all of their weaknesses and vulnerabilities. Oh look, put HIM in magical darkness and his powers shut off - including life support. THAT hero stole your nano-technology to boost himself, but didn't know enough to lock you out of control of it. He can't survive in space without it either. Ah, good times. But I am wandering off target.)
I generally run big mythic campaigns, where having characters at the same level (for the most part) is best for my DMing style + player fun. But for a change fo pace I want to run a mega-dungeon grinder with each player having a stable where those not on the adventure get half XP and all new characters come in at 1st.