Why is it a risk to the company (Meta) to under-level someone, even if they want it?

Good question! There's several reasons:

1. Ratings get weird - If you have someone who is clearly over-performing their level, it messes up calibrations as all engineers within the same level are compared to each other. It's like having Lebron James on a high-school basketball team.
2. Peer envy and performance anxiety - Levels are hidden at Meta, but people gossip and levels are eventually known (especially among more senior people). If people find out that this absolute mega rock-star is also their level, they could feel imposter syndrome and fear of getting PIP-ed from looking bad in comparison.
3. Poaching - It's possible that you'll want to stop being under-leveled, and in that moment, you'll have a moment of weakness as outside companies can offer you that much higher level. At its fastest, Meta can only course correct here every 6 months. That's a long time.

The case I mentioned was pretty extreme though. Peter Cottle was able to be better than most E6s while barely trying. There was no chance he was ever getting PIP-ed at E6, and it was ridiculous to keep him at E5 (even if he wanted it). After getting to E6, he got promoted to E7 relatively fast. He was that good.