Level 10 is not a power ceiling (see DN Guide). It is a resonance ceiling. The point at which a mortal character has accumulated enough experience, enough will, enough weight of deed and story that the Material Realm can no longer comfortably contain them.
Ascension happens when a mortal becomes too much themselves to remain merely mortal.
The Cosmological Mechanism
The Material Realm is shaped for mortal-scale existence. An Ascended character has accumulated enough weight - enough choices, enough consequence, enough genuine transformation - that their presence begins to distort the local fabric of the Material slightly. Their dreams bleed into the Ethereal. Their instincts sharpen in ways they cannot explain. Strangers pause when they pass close enough.
This is the Realism Gradient doing what it does: a being whose resonance outgrows the local density of reality begins to experience the gradient pulling at them. The Material can no longer hold them comfortably at its center.
Where Ascended Mortals Go
Some drift toward the Ethereal, becoming half-unbound from the Material. Some remain in the Material world but become legend rather than active participants - a warrior who has Ascended might be found at a single road, having stood watch there for decades, becoming so identified with the protection of that stretch of ground that the road itself is slightly safer. Some take a final great action that functions as a conclusion: this thing happened, by this person, and the cosmos changed accordingly.
Ascended characters should not return as adventurers. Their time as heroes is complete. But they may appear as patrons, legends, quiet guardians, or rare figures who offer guidance or warnings to those who now stand where they once stood.