Fates, instanced battles and dungeons have a level range.
Sastasha's level range, for example, is approximately 15-18. If I decide that I want to do Sastasha on my level 35 Conjuror, my level will be synced down to 18 for the duration of the dungeon once I join. So outside Sastasha, I'm a level 35 CNJ, but inside I'm level 18 again (and then I go back to being level 35 again once I leave).