It would affect my allies too, like Paraguay. But yes, Brazil's army level is indeed a bit ridiculous... I could understand it in a small, handpicked elite army of 20.000, but in a levied force of 120.000?
OOC : Would affect me more than any of your allies.
And remember that i improved it during peacetime, the "basic training" my conscripts receive is better than what the paraguayan conscripts receive, for instance, now Paraguay is improving his army level during a war when his troops are on the front, are they training on the frontlines? At least my conscripts when recruited are already trained on teh conscriptions centers/barracks/whatever.
That's why my army is better disciplined in theory, it has better training and such.
Or maybe like, the USA on WWII had a horrible army because they conscripted a lot of people, despite their training not being that bad.