I really liked all the other announced changes so far, but this one seems really odd to me.
You said that you decided a ranked/competitive ladder isn't right for Armello, which I can respect. I can definitely see where that came from, and personally, I play Armello to relax and chill out in a low pressure environment, not climb ranking ladders so that works for me.
However, why would you then implement this level-based matchmaking system? This has a couple of issues. Firstly, you already said you don't want to implement a competitive matchmaking environment, so why would you implement one at all (and one which is inferior to a ranking ladder)? Now every match will be "competitive" since people will have a strong motivation to win and earn more stars. So the competition is there, but without the benefit of actual skill-based MM. So you have the "downsides" to a competitive system, and the reasons you allegedly avoided making a ranking ladder, but without any of the actual benefits.
Further, this is an absolutely terrible way of matchmaking. If someone has played 1000 games and has 500 stars, they will be considered to be at the same "skill" rating as someone who has played 500 games and has 500 stars. Yet I think we can all see that in practice, this is probably not the case. So it's like you are deliberately matching people up in the most ineffective way possible.
Essentially, you chose a system which has all the unwelcome parts of a ranking ladder, but none of the benefits, making it an oddly counter-productive choice. Either use a normal ranking ladder like every other competitive game worth it's salt, or simply don't include a rank/level/star/bean/whatever ranking system at all. Trying to do something in between is just harmful and weird.
Again, I felt like the previous changes you guys mentioned were all great, and I hope to see more! I think this MM system is a waste of your time,and better spent on other, more important and more beneficial features.
Thanks for the great game, and for taking my opinion into consideration!
EDIT: As a clarification, I don't have a problem with the leveling system in general. I think a system of leveling up and being upgraded to have cool new aesthetics and whatever else you guys come up with in the future is a neat idea, and adds a bit of fun to the game and a motivation to keep playing. HOWEVER, I don't think it should be attached to the MM system at all.
Either keep the MM system how it is (completely random) or do it right and make an ACTUAL skill-based matching system. Don't do some weird in-between system.