Similar-Vari's journey

I recently interviewed for an internal T4 role at my company, which I was really excited about. A few days after the interview, the recruiter reached out to let me know that the hiring manager thought I would be a strong fit for a different position. They invited me to apply for this new role, which is also with the same manager and has the same responsibilities. However, the catch is that the new role is a T3 position instead of T4, which comes with lower compensation. I'm feeling a bit confused about this situation and wondering how to interpret this change. Is it common for companies to down-level candidates after interviews?