All weapons damage "cap" is determined by the impact rating. When you upgrade the damage it just increases your hit rating which allows you to ignore more defense from the target. However damage is normalized when firing at a level 8 mob while you are level 28, never letting you 1 shot someone or something that is 20 levels below you. The amount of health a level 8 player has (red bar) is a lot smaller than a level 28 player has. Also, defense doesn't start coming into play until your shield is down. (Which is The same across all levels) So in other words dealing 24 damage to a level 8 is a lot more damage being done compared to doing 24 damage to a level 28.