It might be beacuse of your criptex rank. As you buy stuff from him and give him stuff to unlock your reputation with him goes up. The higher your rep, the better the gear. Same thing happens with the vanguards, gunsmith, groups (dead orbit, new monarch, so on) the more you deal with these people the higher your rep gets and the better stuff your given.
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It's 6 at the moment
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It takes about a lvl 3 to consistently get rare items from blue drops. It might scale so you need a lot higher lvl to get then consistently. + you've only done it a cupple of times so statistically the chances are low for you actually getting one :/
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I did get an actual legendary helmet.. but for a different class :(
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Yea they do that. But thats why the vaults there. So when you make that class of character you have gear waiting for them.