Changed from Why Don't Other People See the IL My Companion Gives Me? (I was informed that it is actually guild boon IL people don't see.)
It's a little confusing. I tell someone I'm 13k, but they actually see that I'm 12k. Or someone trying to join your dungeon group says they're 14k, but they look 13k to you.
P.S. I mean when someone inspects me or when I inspect someone else.
EDIT: Is it only if the other person is not in the same zone/instance that I don't see the Item Level their companion gives him or her?
In response to your edit question, same instance doesn't necessarily make you see the others' item levels correctly; sometimes you actually have to be near them too to see it.
Comments
But it's certainly a good thing to point out safespacecadet.
Oh, wait, you can't currently use companions in PVP, can you?
What they don't see is your guild boons.