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Leveling tries to schedule tasks as close to the relevant end of the project as possible, given the various constraints, dependencies, resources, priorities, etc. If a task is marked as completed, it isn't blocking something else from being started, and if a task has nothing blocking it, it will be shoved up against the end of the project. I can see how one might make an argument that the presence of a completed task in a given time slot should signal the leveling code that another task couldn't be done by the same resource in that same time slot (assuming 100% effort), but that's not how it works now, and the option to not schedule tasks before a given date (tomorrow morning being the default offered) seems to handle this pretty well, IMO. Your Gantt chart shouldn't show future work as already completed if the work was done earlier than expected, the Actual view ought to be updated to reflect that.

I think the long and short of it is that if you are building a plan and haven't actually started working it, you probably don't need to turn on the "don't schedule tasks before date" option in the level command, and if you are modifying a plan already in progress, you use that option, probably with tomorrow morning as the date. Is there something I'm missing with this argument?