I totally agree with you tommy the levels are not correct in comparison, but its not my opinion, its obvious deduction by gameplay screen.
look here;
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Its clear the Caio Duilio Class its a level II BB ... than the Littorio Class is a lvl III. So also if i agree with you, paradox decided differently.
Than the littorio sure will not in queue at game start as lvl III BB, and i have serious doubts also Caio Duilio its in queue ready for 1937.
Also if historically Caio Duilio class was a refit of old BBs paradox put it in the game as a new lvl of BB (lvl II).
In conclusion as Johan sayd, Italy have only 2 BBs at start and its all, no queue.... all the others require research and a new build.
The only thing crazier than saying the Caio Duilio (even after the rebuild) is a Bismarck equivalent is putting the P.26/40 in the same slot as the Tiger I. Italy is going to have to be totally redone....