That's exactly the vibe I am getting, even at level one, You are completely stripped of all things that include , armor, weapons and recover items, It makes me want to stay away from quests like these, It give the vibe of complete helplessness, What can you do? When all you can do is give your opponents a punch that does little to NO damage whatsoever! To think that someone is supposedly be able to clear 5 Levels? Absolute bull sheet.
What is frustrating is no matter what you do to level up ( I did manage to get to level 3.), Then why the $@#%# do I always have to start over at level 1? As it stands the prizes are not-obtainable and impossible to get at this point. You could however try and get as many challenge as you can, but , by the time you are able to do so, There may be weapons already in-game that will surpass those offered in mileage points.