Your opponent draws 2 cards. Special Summon 1 "LV" monster from your Graveyard, ignoring the Summoning conditions. The monster that was Special Summoned by this effect cannot attack, nor activate or apply its effect this turn.
That's not true. In several non PVP duels, Level Modulation allowed me to summon a level 8 card from my graveyard, without having any of the other cards in my deck. It's a glitch because it will not allow me to use the card. The card states that it ignores all previous conditions, so discarding and using Level Modulation should work.
I feel like it's worth noting that Level Up! doesn't properly Summon the monster, which I'd assume is likely the reason you were unsuccessful.
In episode 61, look up in wiki. Thier is proof that this card is not working the way intended to be. Here are the text from Chazz Duel.
Turn 3: Chazz
Chazz draws "Graceful Charity" and subsequently activates it to draw three cards and discard two. Chazz then activates "Level Modulation" to allow Sartorius to draw two cards and allow Chazz himself to Special Summon "Armed Dragon LV7" (2800/1000) from his Graveyard in Attack Position, ignoring the summoning conditions. Chazz then Tributes "Armed Dragon LV7" in order to Special Summon "Armed Dragon LV10" (3000/1000) in Attack Position.
Nowadays though, cards in anime tends to work similarly in real life, because people complained that they can't reproduce the cool actions in anime with the same cards.
This has to be a bug. This card won't summon either SM lvl 4 or 8, just tried it. I see no reason this can't work, it says on the card "Ignores summoning conditions" so this is a bug and needs to be fixed
The properly way to use this cards is as follow:
1.SM lvl 4 must have 5 counters
2.Activate SM lvl 4 to SP lvl 8 from hand/deck
3.If Lvl 8 is in the graveyard,u may use
Level Modulation if steps 1 and 2 were follow
An "LV" monster that normally cannot be Special Summoned except by the method in its text CANNOT be Special Summoned from the Graveyard with "Level Modulation" unless it has been previously Special Summoned by the correct procedure. The "ignore the Summoning conditions" text allows for these monsters to be Special Summoned only after they have been properly Summoned by their own effect. This applies to "Horus the Black Flame Dragon LV8", "Armed Dragon LV7", "Silent Swordsman LV7", "Silent Magician LV8", and "Winged Kuriboh LV10".