Probably. The low-item issue has always been there, vanilla too. By the time most loot is really random and frequent, your pretty much higher than level 12, locking you out of a lot of lower items to be dropped. Most are still vendor sold. But why buy them if you got better loot already?
It's more a result of the leveling (rapid at start, stagnating near the end, and there you get massive lootdrops) than the system being broken.
Aaaaanyways, first rather major bug detected.
Despite my explicit warning it was for 209TEL, that onenter file made it to 203TEL. I assume zbyl downloaded it, than later modded it into a module based on the name (203_enter), and on his PC, no warning mail from me not to do so.
Potential gamebreaking if following Corrun Falt (Ithorian Path) and broke a few side-quest. Surely it will get fixed for the full release though.