Well, I don't see any particular reason why the script wouldn't be working, so it'd help if you uploaded a demo for someone to look at or posted your current settings/etc.
However, I can tell you that your coding is a bit off. For one, you should be subclassing Game_Actor, since I highly doubt this would even work for enemies. For another, you're ignoring the concept of expressions - you can plug any expression into an "if" statement, meaning that you can just us "LRConfigs.item(id) > @level." Note that I used "@" instead of "self.level;" it's better practice to do this, since "self.level" will only work if you've got an accessor method (a method used to access a variable from the outside) for that variable, though both should work in most cases. Also, you should probably use a ternary operator - they go something like this:
<expression> ? <expression to replace ternary statement if the first expression is true> : <expression to replace TS otherwise>
Thus, your item_effect(item) method could be written as:
return LRConfigs.item(id) > @level ? false : item_effect_lvl_requirement(item)
Hope that helps ;)