Yes 316 to 296 isn't much but using a a 170 attack damage weapon over a 316 would be inferior. There is a video that proves it. The guy in the video had ayear 1 red death and a year 2 red death. He had weapons to adjust his lblight to make it the same for each time the weapon is equipped. With the year 1 rd he was doing about 163 or so damage he changed to the year 2 rd and was doing over 300 damage to the exact same mob.
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In PVP, the damage disparity is much less. You are still very competitive as a 296 using a 170 weapon. Also fun fact, your weapon light level doesn't determine damage. It's your overall light level. In PVP at least.