I have been under the assumption that a dead person's (weapon) item level is factored into the limit breaker's damage output as "0" (or at least something awful) and thus greatly decreases its potency.
I play a monk and have used hundreds of LB's over the months, and this seems to be consistent 100 % of the time. When things go awry in Titan Extreme, for example, and we have 3-4 people dead, I am counting on a different player to pop the 3x healer LB if needed because I know that me using it on Titan will result in a negligible amount of damage.
I have observed this in all other content as well. If your party is on the verge of wiping, and you use the LB as a clutch to finish off a boss, do not expect great results.