Level Computation in Compile

In the Formatting pane of the Compile UI, the upper right hand side of the interface allows one to specify various data to be included in the compilation. The data can further be subdivided by something called “level.” The intuitive idea of level is the indentation level of items in the Binder.

Is that how level is computed? By simply looking at the static level of an item in the Binder? Or does an item’s level depend on which data are included in the compile? In other words, can I force an item to be of a higher level by excluding its parents?