I don't think it matters what "level" you are at as long as you are enjoying it. In all probability, the more you practice the sooner you are likely to master a piece - whether that is a whole piece, or just a couple of difficult bars.
My Sax teacher and I follow a "what do we fancy today" teaching approach. I had previously learnt to play recorder at primary school, and then violin for 3 years, yet the violin still sounded like I was murdering the cat (after 3 years we were still on "a tune a day - book 1").

At secondary school, I learnt to play the trombone for a couple of years, far better than the violin. The trombone teacher had suggested taking ABRSM grade 3, but I just didn't want to take any exams.
So (many years after leaving school!) I started playing the sax 13 months ago, capable of reading music and reasonably good at getting the correct rhythm out of a piece within a couple of playings, but the thought of taking exams still didn't interest me
😱
However... I have now decided to take the Trinity Guildhall grade 4 Jazz exam. The main reason being that I feel I have no target, direction, raison d'etre (call it what you will) for my practice. I practice 3 or more times a day for 30 mins or so and love practicing, but I felt I had no reason to achieve "perfection". I could play pieces well enough, but the final polish was lacking. I've chosen to do Trinity Guildhall, because I have no desire to do the written theory papers which would leave me stuck at grade 5 with ABRSM, but TG lets you go on to grade 6 and above without the theory. I have scales to learn, 3 pieces to perform, one having a significant amount of impro, and will have to play a piece on first sight on the day etc. I guess there are differences in the 2 exam boards.
I'm not a musician, I'm an engineer, learning theory for theory's sake doesn't interest me at all.
My daughter is about to take her ABRSM grade 4 violin, she at least doesn't sound like the cat is still being strangled
🙂
One of my standard practice pieces is Scott Joplin's Maple Leaf Rag. I think it's a grade 6 piece, and I can play it reasonably well, but I don't think I've ever played it perfectly. However, I know that I have made significant progress with it over the past 4 or so months that I have practised it, not only with just hitting all the notes, but with inonation and feeling as well.
Do grades matter? Well, I guess it gives others an indication of you ability in general, commonly-understood, terms, that's all
🙂))