I recently learned that someone who is now a friend's first impression of me was one that is not great. Some five years ago, I traveled to an event, got placed in a lower level than my romantic partner, and essentially had a fit. It wasn't my finest moment. At the time, there was a lot of ego and a lot of emotion all wrapped up in the implications of level placement, and a whole lot of distress. Soon, I'll be writing a post that gets into some of the organizer-perspective questions that should be asked when designing track auditions. Right now, however, I want to talk to you, perfectly average dancer.
Remember that level placements rarely say anything about the whole of your dancing. Very rarely do level placements consist of a do-everything-you-know-how-to-do-at-the-top-of-your-game test. First of all, that would take forever, and honestly, the conditions aren't right for that. Unless you thrive while being watched, most folk have their best dances when no one is looking, on the floor with their favorite person that they selected specifically for the song that they chose to dance to. Auditions often consist of random partners, random music, and random tempos. The floor might be crowded and intimidating, or it might be very empty and intimidating.
On top of that, the instructors might have been instructed to look for different things, or they could be basing it entirely on their own preferences. They could be looking for the folks with the highest levels of creativity, or the cleanest basics. They could be looking for the top x dancers, trying to find a natural break, or grabbing everyone who is able to do a certain set of skills. Without knowing which of these directives the instructors are using, it's hard to evaluate your own performance accurately. If you can, ask those questions!
One of the worst things is thinking that they're looking for skills x, y, and z, which you definitely have, when they're looking for the top ten follows and leads. It can make shake your sense of self-evaluation, unnecessarily.
Still, all of these conflating factors mean that auditions are primarily evaluations of your ability to do auditions. This doesn't mean that they don't have some purpose, or that they're useless. It just means that the feelings of being placed lower than you expected don't necessarily have to be crushing ego blows. Maybe you just need to practice auditioning more, or maybe it's time to take a private lesson from one of the auditioners to figure out where you should be focusing your learning time to level up your own dancing.