i guess i'm not positive, but i've always assumed character do not have a 'hard' concept of their xp totals and how they relate to level. Rather i've assumed its 'softer', in that they are aware they are 'on the verge' of some personal discovery and would be able to tell when an ability is 'thoroughly entrenched' in their brain. I'd say it's probably comparable to hit points, where you aren't actually aware the the specific numbers, you understand your relative position in it.
So to answer your question, yes i think that if crafting a wand would cause bazrim to go down a level, i think he's aware of it.
So to answer your question, yes i think that if crafting a wand would cause bazrim to go down a level, i think he's aware of it.