From Dark and Darker Wiki
If I was to say wear all green gear and get put into the moderate gear or higher bracket, will these brackets give us better loot drops in the dungeons. Like instead of a green, we have a better chance of getting a blue item? I'm hoping it does because the squire even says that because of it, you will be going into more dangerous dungeons. If they don't give us better loot then what is even the point of it?