The concepts I mentioned are stock standard xianxia concepts, and the point I wanted to make is that these are inherently limiting. When having three different levels you'll always have to leave characters behind, for example. Purely from a character interaction perspective this is a limitation. Standard xianxia is like taking ten of these flawed concepts, stacking them together, ignoring the limitations and just outputting chapters. It's going to be hell to make a good novel out of that, which is my original point. Fixing or avoiding some of the concepts of course allows for a better novel, like in CCG's case. But at some point you have to ask yourself if it's even xianxia as we know it anymore.
I have trouble understanding the point you're making with LotR. Of course growth that fast is bad, it's one of the big limitations of xianxia. Imagine if Frodo was the most powerful character of the fellowship by half of book two, how boring would that become. The other characters could all go in the rubbish bin. No reliance on others anymore, no interactions necessary.
But LotR doesn't have any of the limitations in the first place, so ...