In my mind, an RPG leveling system should have four major goals.
Gives the player freedom to customize their strategies by developing their characters' abilities.
Reinforces the personality of each character.
Rewards and surprises the player.
Adds long-term strategy.
Unfortunately, these goals often serve at cross-purposes. For example, if you make a game where each character's progression is strictly predetermined, it's easy to reinforce their personalities and to reward and surprise the player but you lose out on long-term strategy & the freedom to customize your strategy. Conversely, a system where each character is a blank slate and LV-Ups are clearly seen in advance is great for customization & long-term strategy but can be weak in personality reinforcement and surprising the player (you can run into situations where the player fully plans out their progression before they play and then gets bored while playing because they already know what's going to happen next).
What are some of your favorite examples of RPG leveling systems?