Just found out this bug a while ago.. I sent trade to someone with my 5 star staff and after I cancelled it, it turns to level 1.
It will be corrected in the next maintenance. Open a ticket in support so that we can restore the item's level. Thank you.
It happened with me two times, but the admins give me only 400 instant battle tickets. For one absolute shield (lvl 19) and one sh armor (lvl23).