Materia melding - Level 20 gear, level 15 materia, no stats

So, I have a bunch of level 1 materia left over from 1.0. The item level for the materia is 15. As I'm attempting to level all of my classes evenly, I decided to use some of this materia, since it's otherwise useless.

I have gear levels 18-20.

I have materia that lists the item level as 15.

When I try to meld the materia, I'm given a message that the item level is too low to benefit from the materia. The stat materia (STR, DEX, etc.) shows NO bonus if I attempt to meld it to level 18/20 gear. The Determination +1, Accuracy +2 and Critical Hit materia provide the correct stats.

Am I doing something wrong, or is this a bug that needs to be reported?

You are failing to notice that, according to the item's Item Level, there is cap on what each attribute can be. So you cannot infinitely stack one type of materia, certain attributes will never, ever, go above a certain level. On the same note, as long as the items have the same Item Level, their attribute caps are the same (Thus the darksteel weapons such as Sarnga which are IL70 have the same stat caps as as the primal weapons which are also IL70)

Thank you, I hadn't realized that there was a cap on stats. So if the item by itself already has the maximum value for strength, then even a single materia meld for +1 strength won't do anything. Correct?

Correct.
Although sometimes you are, for example, 4 points under the cap, and you try to put in a T3 materia that gives +5. You will gain only +4.

This was all level 1 materia that was cracked. I traded it in thinking that I'd use it on mid/low level gear as I worked to level my classes. But, what you're saying makes perfect sense as I think about what I was/wasn't able to do. All of the melds would succeed, but a lot of my gear already had stat bonuses. The materia that I was able to meld and get the full bonus for, was all for stuff that the original gear didn't have.

Thanks again for pointing this out to me! It's good that I'm learning this now before I tried to meld without thinking on higher level gears.

You get a happy Lala dance!