Out of the near infinite number of possible characters to choose from, it is only removing the ones that don't fit within the definitions of that game and that story. If the rules are "new characters start off at a lower level" then "characters at the same or greater level" aren't in the running and shouldn't be considered as new character fodder. This could mean that you just don't make a super experienced, grizzled veteran as your new first level character, or it could mean that you use different definitions of what levels translate to in the in game reality.
That would be the fault of the player(s) in that game having expectations that ignore the mechanics of the game they are playing. It only "punishes" the player of the druid for assigning an arbitrary definition of "I'm better at this thing than you even though your numbers are higher."
It's not merely that numbers are higher, it's that they are flat out doing things considerably more potent in effect. Spells have the tiers they have for a reason, and classes has access to them at different levels for a reason; as a benchmark of how much one knows, how much one can influence the world, magically-speaking. There are massive jumps in relative power level at each odd spell level especially. 3rd level spells, 5th level spells, and so on, have potent, defining abilities that unlock as a general rule.
And this style of game (which again is not a style that I even regularly play) is not attempting to mimic any of those things. What it's attempting to mimic is a story where core characters start off small and grow.
Which is fine to a degree, except that it starts to break down significantly once the core characters are many levels in and new PCs are introduced. While it's great to want the characters to grow, at the same time WHY would a group of characters be ok with someone coming in to their group who is considerably outclassed? From a strictly narrative perspective, a group of people have been adventuring for a while, and in comes new character X. X seems interesting, has a vibrant personality, looks like they have potential. But. Time and time again, out of combat (using skills and non-combat spells), they don't actually appear to bring nearly as much to the table as even random NPCs comparable to them are bringing. In dangerous situations, they aren't merely ineffective, they are a liability. The rest of the group, you know can take a hit or two, even a nasty one, and pull through. But damn if X doesn't keep getting dropped over and over, even when protected by the group, from what should be minor threats to the party.
A group of people would only put up with that for so long before saying look, you are just not a great fit. I'm sorry, you're a nice person and all, but having you is a liability, not a benefit.
Like I said, even from a narrative sense, it doesn't actually make sense.
There's a reason I brought up (and notice you didn't address) NPCs. Apply the ES@1 to NPCs, and see how well it works. Because, again, every PC is an NPC until a player takes control of it. They should exist within the game world on their own in a way that makes sense from both mechanical and narrative perspectives.
Plus, as a player? As someone who has DMed large numbers of players over the years (working at a FLGS for ~13 years can do that; you see a lot of new faces)? Yeah, this kind of campaign would likely be a deal-breaker quite quickly for a great many people. Hence the results of the poll itself. And if over the course of an adventure a major character dies? That player, too, will have to bring in a PC at level 1. I suspect, based on a lot of experience, that a player that has that happen might just see how profoundly unfun it can be to be shoved so far in the mechanical hole, so to speak. To go from this epic hero doing epic deeds to being potentially downed by a lone goblin with a single hit, and a profound liability to the rest of the group.
Others have mentioned just going ahead and doing low-level content for a while until the lowbie PCs catch up a bit. That, too, is something that can yank a party out of their narrative. The group was in the midst of a mission to save the world from BBEG, and making headway. Suddenly, they stop to babysit some inexperienced novice? Facing down enemies that are, at this point, in no way a significant threat to them? Pausing a potentially time-crunched mission to help a newbie train? I can almost FEEL the need for a montage to just get past that for the upteenth time. I would in all likelihood actually play an 80s montage song and tell them to just go ahead and level up.
It doesn't feel like an organic world anymore, it makes it feel much, much more artificial if PCs (and only PCs, mind you) can only ever be some green newbie who has to start at the bottom.
It pulls you right out of the narrative if you meet YET ANOTHER inexperienced young adventurer, who the party takes under their wing. A half-dozen such newbies later, that gets so old, and makes progressively less and less sense. After all, these are PCs who actually have things to DO. They are already on a path, or multiple paths. Stopping for any new green rookie that catches their eye makes no narrative sense at all in that context.
Hence, why I simply remove XP and levels as rewards at all. They are a benchmark for the overall power level of the campaign itself. The rewards in-game come from elsewhere, and are more narrative in nature, less mechanical. My groups have stories to tell. And while occasionally having a novice come in to an experienced party might be fun, as a device it gets old incredibly quickly for the same exact reason that grinding new characters in video games over and over, doing essentially the same general type of content over and over, gets old quick for most people.