It currently serves very little to no purpose and no one cares what your Physical Level is. Also, I'm going to go on a whim and say that as much as you and I love going on Lv1 classes and destroying stuff - that is quite clearly not working as planned. I'm sure they forgot to lower the Rank cap on Physical Levels for the early stages of the game.

They can trash it for all I care. Make stats predefined by rank/class and use the spot for something better; like specs.