Lots of online Chinese reading level tests start out by trying to figure out how many words or Chinese characters (hanzi) you know.
Those tests are focused on the wrong question. They take you in the wrong direction.
First, they don't have good ways of guessing how many words or characters you know. Thankfully, most recent tests have gone beyond testing how many characters you know (don't even bother with the character-based ones). Now they test words. They assume you know some words based on other words you know. If they make conservative assumptions, the number is too low (I've seen natives told they only can read 2000 word before). Too liberal and the number gets really high. Unless a test asks you about every single word you know, they are just guessing.
More importantly, Chinese is about more than characters. You can know all the hanzi in a word and still not know the word. Chinese is about more than words. When reading Chinese, it's possible to know all the words in a sentence and still not understand the sentence. (For intermediate learners, this situation is relatively common!) When learning any language, the key is to always look deeper: first you learn hanzi, then you learn words, then you learn sentences, then passages and texts.
That's why word based tests will never work. Word based tests are a vanity metric: something that makes you feel good but doesn't have much impact on what you do.
What's the solution? We need to change the question reading level tests answer. The question a Chinese reading level test should ask is: What's the next thing I should try to learn?
Update: This post is aimed at online Chinese reading level tests and not at standardized tests like the HSK.
Are the Chinese Reading Level tests you've taken accurate? Let me know in the comments.