Dungeon Deck confusion

Can anyone explain what the rulebook is trying to say in regards to the Dungeon Decks discard/shuffling for each level? I’ve been reading and re-reading this section in the rulebook and it just doesn’t make sense to me (or my other players). When all characters are level 0 (starting level), do we just keep shuffling the level 0 dungeon cards back to the top of the deck? My understanding is also that the level 0 cards should be removed when characters level up, but is that after ALL characters level up or just one? Our confusion also comes in from the fact that there’s only ONE of each other level creature in the decks. There are 3 level 0 creatures, but only one of each other level. The whole dungeon deck discard/reshuffle rule isn’t clear to me at all. I’m hoping someone can help clear this up. Thanks!