Does that mean you start out at Prince difficulty but as the game progresses you end up with Deity-equivalent AI strength?
No. The Deity AI gets a 40% discount to start with on most things, then that 60% of base value is discounted AGAIN depending on the age...5% per age, stacked, so a modern era deity AI production cost is 75% of 60%, ie 45% of the hammer cost seen by the player. On Prince they only get a 5% bonus to start with, so the modern era AI is only getting 75% on 95%, ie their production cost is still a little over 70% of yours. But a normal prince AI in modern era is only getting a 95% on 95% discount, so their cost is still more than 90% of yours even in modern era.
Note, you
could increase this value to even higher than deity (I assume) should you be so inclined. Be aware that this acceleration affects a whole bunch of AI costs though. Production, and the food needed for population growth are the main ones, but the AI will really hit the gas through the course of the game if you set it too high. And obviously if you allow it to stack to a hundred certain mathematical functions will no doubt explode.
I experimented to find a good start/acceleration game for me, but it's been a while since I made any adjustments. I'm pretty sure I ended up with prince and 5. I also play BetterBAT AI on huge maps with 20 civs, so YMMV.
PS...if you are a cruel person and have access to a Civ playing friend's computer, modding this value on the level they normally play without telling them is good for some laughs. Most changes you might make they would notice because they show up right away, but having the game just start running away from them in the middle is much harder to deal with.