The level knob is there so you can balance the overdrive sound with the non overdrive sound. Consider the master as the volume control for your "clean channel" and the level the control for the "overdrive channel". You just need to adjust the level control to balance it. It is really a one channel amp, think of the level control the same as the level control on an overdrive pedal, which is usually set so the level of clean and overdrive levels is the same. Or not, if you want to use it as a " boost ".Question regarding the Overdrive circuit. I got an on/off switch so I can kick in the OD on my 500 v3 at will. I notice that when I turn it on I get a volume boost and it's noticeably more trebley (is that a word??). That normal? Settings are both Drive and Level knobs at around 11 0'clock-ish. Gain at noon, Master to suit.
About a gnarly treble boost, turn off your tweeter/horn when using overdrive. Overdrive creates more information in the upper harmonics that is not ideally used with high frequency drivers.
Also, the gain knob controls the level of overdrive as well, so if you want less distortion, lower the gain at the front end to compensate.
I say the tweeter is the cause of the unwanted treble boost
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