There's a level limit based on what could be called "Talent" and the "Strength of the Soul". The strength is related with life experience and age, so a 15 yo villager that never picked a sword will have a low level limit of around 20, while someone that have been training since young (and depending on talent) will have higher level limits.
Reincarnated people are basically like newborn babies with weak soul, so their level limit when they appear there is ONE and they can't increase it. And the Passive Enhancement skills don't increase the base status, but how much you gain when you level up.
MC was able to increase his level because he got the catch on the Skill Board, you guys should guess what skills it is. But since he's a reincarnated person, everyone keeps saying that he's inferior and the MC went "Oh, I thought I was strong but this is just the average for a normal person? I need to work harder then!".