Frankly, Richter got off easy. The imp was fighting for his soul, but is now down to taking all of his exp of each type. Sure Richter would be a level 1 noob with no skills, but that could be remedied using skillbooks. With a bit of luck he would still be an enchanter and a tier 2 chaos lord, as there is no telling what happens when you drop in level. It would be pretty abusable if you could get a different enchanter specialisation and a different tier up by dropping in level though. Not to mention Richter's mind, soul and body were rebuilt upon his tier up, so that would have to be reverted by the universe for him to go back down in tier. Losing to the imp might not be a bad thing.
from balancing perspective might be anytime MC gets too OP story is over. AK has been battling this problem constantly and doing an admirable job
I think that he will still have all of his Skills (and Spells) but they will all drop to Level One Exp Zero, so he will lose all his Bonuses, Spells (except for Lvl1's), ect.