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Orginally it seemed that in ESO you would be restricted to your faction terms of leveling. It seems like after fan feedback they went with the 50+ system where you can level in other zones after level 50. This is a pretty genius method that I can't seem to recall being done before in any MMO.
It accomplishes many things:
I don't see any flaw with this method. And since ZoS went the extra mile with making unique content for 3 factions instead of taking the lazy way out and having one faction or two faction questing content, this in itself adds a lot of longevity to the game especially during launch (the most crucial stage).
I don't see one drawback to this system.