This is a structural oddity of discourse that took me a while to get a handle on as well, but I have come to appreciate it with time. It’s a great feature.
That said, it’s unnecessarily confusing for community members who don’t really care about the internal workings of discourse, so I think it’s a good idea to shield them from it. There is an open feature request to only show one trust level badge, which would go a long way to doing that.
If you go to the various Trust Level badges you can see
This badge is granted when you reach trust level …
That is, “when you reach” and not “when you are”
In other words, the granting of Trust Levels are more like “milestones” than “current level”, though the current level is the highest reached and Trust Level 3 should probably say “reach and maintain” as it can be un-granted.
In explaining that, I see it can be a bit confusing, can’t it?