How does the Threat Level relate to my character?
As of the latest patch, which included in the weapon and armor rebalancing, it appears that threat level is tied to which sector of the galaxy you are in (and thus which tier of gear you likely have). As I glance around the starmap, everything in sector A appears to be threat level 1. Everything in Sector B appears to be threat level 2. Obviously, being in beta, this is all likely to changed, but based on what I've experienced in sectors A and B I suspect that threat level is now tied to which tier of gear is appropriate for it.
Threat Level 1 would be appropriate up through Copper Armor and Weapons, made from the Iron Anvil. Threat Level 2 would be appropriate up through Silver Armor and Weapons, made from the Metalworking Station. Threat Level 3 would be gold armor, etc.
As of the latest patch, monsters no longer have their own threat levels. Update to this answer pending further play experience
Threat levels do not directly relate to your own gear, or what you are equipped with.
It is still recommended that you gear up quickly to deal with more threatening monsters, as all monsters seem to be much more challenging now. A weapon with armor penetration equal to that planet's threat level wil help, but better still is armor that has a defense bonus at least equal to the threat level, if not greater.
These are not the only 'threats' that you should be concerned about, as a Snow planet or a Moon will also be very cold, and very difficult to traverse without armor with a high warmth level (indicated, when you are in your inventory and hover your mouse over the armor, by the Sun symbol, or in the crafting menu when you click on the armor you wish to craft).
As of 1.0 stable, the Threat Level of a planet is directly related to the planetary biome of planet, not the character. The biome of a planet can be identified by the highlighted keywords in its description, while their threat level is identified by the "Threat" keyword.
- Tier 1 - Low - Iron - Barren1, Asteroid Field, Lush
- Tier 2 - Moderate - Tungsten - Desert, Forest
- Tier 3 - Risky - Titanium - Ocean, Snow, Dry Grassland
- Tier 4 - Dangerous - Durasteel - Mutated, Jungle, Toxic
- Tier 5 - Extreme - Aegisalt, Ferozium, Violium - Frozen, Dark, Frigid Ocean
- Tier 6 - Inconceivable - Solarium - Magma, Volcanic, Scotched
1 Barren planets do not have any ores on them
2 All planets also have coal, copper, silver, gold, core fragment and diamond ores. These are not used as the primary material for most weapons and armor.
All enemies receive a damage multiplier based on the thread level of the planet they're on, so the same enemy species on a Scotched planet (Inconceivable threat) will do significantly more damage than one on a Lush planet (Low threat). Higher threat level planets will also require more EPP upgrades as their environments are less hospitable.
Planets with higher threat level contains higher tiered ores, inclusive of all lower tiered once - eg. a Mutated planet (Dangerous threat) will have Iron, Tungsten, Titanium and Durasteel ore. In general, you need the previous tier's armor and weaponry to explore planets of the next threat level, thus creating a natural progression system, not unlike that of Terraria.