It would be better to think of the MC style ranks as levels of intuition/raw talent as opposed to actual mastery of power.
In the context of the empire, being an ACTUAL master or sage rank puts you as one of the empires top talents, but those official rankings are ones that are vigorously tested and officiated to ensure the person can in fact perform at such a high level, these official rankings are not the same as the MC rankings we see in the stats menu.
The MC has only been trained in the fundamentals of cultivation, and all their rank advancements have been the result of forced bursts of enlightenment as opposed to genuine combat experience, tutelage and understanding. The way I like to think of it is they have a sages or masters level of aptitude which makes it easier for them to invent, learn, execute and improvise techniques on the fly as opposed to them being someone who has the combat power to 1v1 someone from the inner kingdoms, the MC doesn't have the combat experience nor the aura pressure...yet *wink wink*.
As the tournament progresses naturally combat will get harder, and by challenges 9 to 12 you will be pitted against those who have the right to call themselves prodigies.
So far the book has only gotten past the first 3 challenges out of 12 so it makes sense that the rank style requirements are lower and why it feels like having a higher rank doesn't mean much.
You must remember though, opportunities like the ones you find in the dragon trial you won't find again in later chapters. Other elements and styles will be promoted in later chapters so that all builds are being accommodated for, and what you don't seize in earlier chapters could result in options being locked out later on, though a lack of ranking won't lock you out of progressing the story since there are always options that solely rely on your combat cores, you might not be able to reach certain outcomes or just perform really cool moves because you don't have a high enough rank of aptitude to pull it off.