This was insane to try out, I did 10 Nightfalls at 1994 power as that was as low as I could go since I have been upgrading all my vault every time I get a Pinnacle drop, and almost every game I was with other 199X players, but I did see a handful of higher level players.
I did another 6 at my normal level and sure enough, every game was around my same level. Not even a single 199X which I was playing with over the past few hours. It is absolutely criminal how poorly this works. Bungie should be ashamed of themselves with how badly their code is.
Between this, flawed Events, broken Tonics, Weightgate, and who knows what else we haven't confirmed yet, they just need to drop everything they are doing and have everyone go through this game to fix the game rather than adding anything new to try and "win" us back.
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I did the same test you did and I sincerely hope Bungie actually sees my post, because it's kind of sad to think that a system that should unify the community is actually separating it and it's even sadder to know that new players are going through so much trouble in a game that should be fun to play and not frustrating.