So I just tried simulating to level 4 with a couple of riders to test - what happens when you level up in terms of your current "specific training level". The first rider leveled up to 4 without being at 100 % in stage race. The second rider was at 100 % for all levels. From the screenshots you can see how much of an impact that have made. So Don't level up unless you are at 100 % in what you want to level up in.
The second thing I have confirmed is that the farther you are from your max potential when leveling up the more each attribute will increase when leveling up.
In this screenshot you can see a 100 % level up but without improving potential
In this you can see a 100 % level up with a one time improvement in potential. As you can see TT increase have increased by one.