Levels are attained as you reach the next xp-threshold, and with levels you gain the capacity to learn more skills and become more powerful at killing things. Those who seek to roleplay may do so, but really decent roleplay is a minority and its no suprise when everyone around in running around killing things. Every day, the game reboots and many of the events of the previous day are erased. Players do gain in level and skills through these days, but the features of the game such as items and monsters all start again as they were. Moreover, most areas of the game also reset far more frequently, like every 30 minutes.
Players enter the area, clean it out, leave and can come back later and do it all again.
Resets to have the element of randomness built into them, so in some places things may be somewhat different. However, the philosophy is one of lack of change in the world and it is very intrinsic to the game. Because of this reset-mode philosophy, the game itself is also very static. Generally, this might mean a loss of a level or less. Though MUME has features like Mandos Healing and Mandos Sleep, it maximally violates the spirit of Tolkien's world when it comes to the Death.