The penalty for fighting lower level mobs may come from the same page but lower down:
https://wiki.project1999.com/Game_Me...ement_by_Level
"If the mob is light blue or green, the xp earned will be 50%, 25% or 0% of the stated value."
The person you spoke to may have got the definition of being 'light blue' as >5 levels lower than you.
So a mob that gives 1000 XP normally would only give 500, 250 or 0 XP if 'light blue', green or green.