https://www.reddit.com/r/AnthemTheGa...oot_rarity_is/
Added additional post from another guy on this yesterday. Your item level seems to impact the quality of loot dropped (not the GM difficulty alone), so it seems to potentially impact both solo and group play.
These kinds of hidden mechanics seem to continually get uncovered and reacted to poorly by the community. BW needs to be more transparent (you know, that thing they totally promised) to head off shit like this. Both because these hidden mechanics usually seem very unpopular and because players are frustrated with how obtuse and secretive basic mechanics like drops are.