I don't think it's tied to level.
At best I only use them as a rough guide, or a suggestion, very often I go with my own decision, which is often a tile or so from the suggestion.
Sometimes also, it's possible to get 1 city to cover what the AI suggests for 2 cities. This will inevitably be a stronger city than having 2 smaller ones. However, this can sometimes take you away from the coast when you need a coastal city.
Bottom line is to treat them as a guide, and think for yourself, rather than taking them for granted, especially at higher levels.