Clyde Lee Graham
First Post
Of course, he can't scribe a 4th-level spell into his spellbook yet.
That's incorrect. If he's borrowing another wizard's spell book, assuming he can make the spellcraft check, he can scribe spells that he is incapable of casting. It's not much different than the spellcraft check you have to make to cast from a scroll higher than your level in that respect.
Now, your two free spells when you level are different. Those, as it says, can't be any higher than what you can cast when you gain that level.