This leads to players seeking out Ultra Space as early as possible - instead of it being the late game area it's intended to be.
I'd patch this exploit by adjusting the catch formula so catching Pokémon above the current highest level on your team becomes increasingly difficult.
Most of the original games don't account for that because their linear progression means you're very unlikely to ever be in that situation. But Scarlet/Violet did face the same dilemma of being open world games where players can skip to higher level areas. They solved this by adding a modifier based on your "obedience level" that makes it increasingly harder to catch Pokémon the more additional badges would be required to control them.
Pixelmon doesn't have this obedience system, so instead I'd make it depend on your team's highest level, like similar scaling mechanics (Bosses, spawn levels).
I think this penalty could easily be as high as halving the effective chance for every 5 levels above your highest.
That would still leave it viable enough to catch Pokémon just slightly above your current level - but trying to catch something that's some 20 levels overleveled would be much harder. Spawns below your current highest level stay unaffected.