There was a thread posted on Reddit with a few testing results and it does indicate that with completely equivalent gearing but different levels, Embraces scaled lower versus Physick. There was also another thread on this particular forum discussing it but I haven't taken the opportunity to look for it.

To me, while this test does prove "something" is going on, it doesn't directly show this is a gear creep factor or if this is a level scaling factor (or even both at the same time, for that matter). I feel there needs to be more tests run, namely a SCH with a level 1 book and basically finding data points for the Embrace % versus Physik on multiple data point levels.

For example, if a level 15 SCH that is completely naked except for a level 1 book shows their Embrace is approximately 60 or 70% of the power of a Physik, then this clearly indicates a downward trend of fairy power as the SCH raises in power and is completely intentional. Admittidly as well, the scaling from 51-60 is significantly different compared to 1-50.

I'll probably end up testing this myself directly once I get a little time and clean out my inventory a little bit.