It is fair to be playing against 2-3 levels difference. It's not fair for active managers to always be playing against Managers with access to a higher Q TM every season.
Again I'll say I like the idea of fixed ranges rather than the loose concept of fixed Q. However I don't like the idea that it should be predictable eg "next Season is my easier Cup" or "Cup is a no go for me next Season". That would just introduce new reasons to complain. I'd rather have my chance managed by luck than by design.
In theory I'd like a fixed level range then all the teams thrown in the air and 127 chosen to be in my Cup. Whether I'd like it in practice if I got 3 bad ones in a row is another matter.
Its a game designed around progression and all solutions will have unfairness built it.
Other more wacky changes might include:
using the exiting mechanic but weighting the Q calculation.
Teams drawn from Lower levels would have a slightly higher Q (but less than +5Q) than mean or median level and those from higher levels have a slightly lower actual Q (but greater than -5Q). So........active higher level managers can have an advantage from the TM but only if they sign players and this alone is not enough to put them 'out of sight' of active lower levels.
PS the above wacky suggestion is not the finished article, its just a prompt for what's possible
Disclaimer: The ideas presented here are designed to convey the impression of thought, there is no guarantee that any thinking was actually done.