You would have to choose not to take the level if quests were locked 2 levels or 0 levels over base either way. That will just make you do quests for no xp a little earlier than it currently is. If you take the level before doing everything in that range, you lock yourself out of that much favor. Your problem seems to be the 5k favor requirement. You will have to do that many quests if you want the 5k favor reward, no matter where you set the lockout.
It feels like the challenge you wanted is something like "get to 30 by doing quests at base level at minimum difficulty reaper 1." While you can do that, there is no specific reward or leaderboard for that.
To me the definition of hardcore is pretty simple: you die, your character is gone. Then they set some goals like 5k reward. How to get 5k reward easily in that case? Get to lv 30 safely then do every quest without any risks. To avoid that, they set a quest lockout. They chose 4 lvs over base. Could have been 2 or 0 over base. It would still be a whole lot of quests to do, but the 4 lvs seems to be a pretty decent amount to allow more people to have fun playing a naked character and still have an achievable goal to the majority. The thing is they didn't set a goal you liked.
I'm not sure your design would be appealing to the majority and maybe their hardcore implementation is not for you. Sadly, there might be no point for you in hardcore as you say. These things happen, and they can't appeal to everyone at the same time.
The rewards are insanely ugly anyway, but I really like the new champs. Wish they would show up on live, if not all the time, at least during champion hunter events.