The fighter getting a new attack is not very fine grained....
1e attack progression is vastly more fine grained than it is in later editions - 4e and 5e in particular. The Fighter's first bump in attacks per round is 5/4, meaning that the get 1 extra attack every four rounds of combat. This is no advantage at all in combats that only last 3 rounds, and you could end up fighting for seven rounds and get only 1 extra attack. Fighters were reasonably balanced until Weapon Specialization came along and broke them completely.
The bump for 1e AD&D's M-Us when you first got your 1st 3rd level spell and suddenly got access to game changing direct damage like fireball or lightning bolt was pretty huge, and that is an example of how balancing 1e's very simple mechanics gets really difficult. Without completely reimagining the spell progression for 1e (which is a possibility IMO), it's not clear how you avoid that issue and even if you do its going to show up eventually. On the other hand, the relative potency of direct damage had a hidden advantage for the system, is it tended to keep magic less fiddly compared to 3e's nerfed direct damage and consequent reliance on buffs and debuffs, and a 5th level M-U getting 1 fireball a day to nova with didn't have that outsized of an effect provided you were using the assumed haven/delve format.
What is telling though with respect to the M-U leveling table, is you'd expect fairly easy XP progression through 4th level and then a big bump in XP required to level starting at 5th level, with increasingly large bumps as each new level of spell came online. But that logical progression is very much what you don't see in the M-U table. Still, aside from the wonky XP progression and fireball being relatively OP for its level given the low hit points of most opponents, the M-U in 1e AD&D is reasonably balanced provided you don't get to heavily into illusion abuse and follow all the rules for casting a spell.
I cannot look at character levels in 1e land and say this characters is more powerful than that and I think that undermines the games design including adventure design.
It is a very different design philosophy compared to 3e and later editions, where you have all these assumptions about CR party level and encounters designed on some sort of theoretical budget. Honestly, I can't say that I am a fan of that design any way, so the biggest issue for me is not that it undermines the idea of encounters as balanced tactical skirmish challenges, but simply that I feel like a game should have as few unique tables as possible as part of the rules to avoid needing to flip through the book to look things up.
By and large, I still do encounter design very much like I did for 1e. I do pay some attention to CR and party level, but I pay a lot more attention to what the setting implies should be there and less to whether it makes an idealized challenge for the party.