If you want to be a pure sandbagger that only takes advantage of Sage then you could level very slowly... but, honestly, I don't see much point in that. Your account would be missing too much of the benefits of being higher-leveled and doesn't have an end game in mind at that point. Even just something like advancing as far as possible through Ninja Exam gives you added bonus overtime that has more value towards an end game.

STILL... you don't want to level TOO fast. And I think the biggest reason there is SURVIVAL TRIAL.

If you level too fast and can't even reliably breakthrough on Survival then you definitely need to slow your roll. Going through Survival trial everyday is just too big of a benefit and you'd be wasting too many possible resources by leaving that at the door.

So, personally, I would suggest your ability to navigate Survival Trial as the biggest marker in whether or not you need to stop trying to get XP. Even if you're just trying to get as much power as possible on your server then you don't want to ever be at a point where Survival is too hard for you, in my opinion. And if you try to level as fast as possible in the game then it's actually pretty easy to reach that point in the game, as a f2p.

Sage benefits the sandbagger for sure... but 9 GNW, 9 tails, and group summons all benefit a higher level and as much pure battle power as possible and really counteract the little bit of feel good you get for being better in Sage, in my opinion. Sage is still going to be owned by the P2W players afterall. I think you just accept that Sage is for the sandbagging/P2W players and don't fret too much about it, myself.

In the meantime, if you're playing towards end game then levels are also beneficial towards things like getting through Ninja Exam better... and those benefits accrue over the length of your character and any lost battlepower you have is just power that you'll forever miss out on. Even more, it's not just that you do better in GNW with the higher levels... it's that most groups are likely to give more and better packs on a consistent player to their higher level/higher battle power players. Especially if it means gains from packs from GNW then something like Sage doesn't come close to giving you the benefits of higher battle power at any cost, methinks.

Also, if you're trying to sandbag at all then that probably means you're leaving things like Wanted missions on the table... which, again, equates to lost battle power in your end game and in the long run.

So... it's whatever you're playing for. There's no wrong answer and if you want to sandbag a lot or a little or whatever then that's all cool... but there is a very real cost.

EDIT: And if you're part of a newer server then I would DEFINITELY try to level as fast as possible and focus on power for your server! If you're someone joining an established server then the idea of having a ton of power relative to those around you on your server is a lot less appealing probably since you start off so far away... but someone that's 4th on their server in power?!? YEAH, why sandbag on that account? Get ALL the battle power! If the question is how would it benefit "you" (someone 4th in power in their server)? It wouldn't. It simply wouldn't.