The idea to scale watermarked gear (HWM) based on the players actual HWM is not a bad idea at all. We don’t want fresh 60’s instantly scaling to 590+ gear score. However, this system punishes crafters that do not wish to work their watermark.
A 2nd, parallel, watermark scaling metric should be created – something like ‘crafting expertise’. This would not increase their gear score drops like the HWM/expertise does, but it would allow them to scale their items based on crafting expertise, even if HWM is low.
For example, if a crafter has 200 armoring then their crafting expertise would be 600, and they would be able to scale equipped armor to 600 ilvl. Jewelry scaling would require jewelcrafting, etc. However, if their HWM/expertise was only 500, then their item drops from monsters would still only scale around the 500 level.
This way, we aren’t punishing crafters that wish to craft their own legendary gear @ 200 trade skill.