The game doesn't cap final damage dealt, but effective weapon damage. This is why with sufficient STR/ATK buffs a player can hit for more than the "capped" value. As a melee 1-9 you're capped to the equivalent of a 10 damage weapon. During the teens you're capped to 14 damage, and during the 20's it's capped to 30. Priest types have slightly lower caps, such as during the teens they're capped to the equivalent of a 12 damage weapon as opposed to the 14 of melee types.
Players run into these caps even on green. If a low-level Paladin buys a 11/43 vendor-bought Claymore, it counts as 10/43 until level 10. If that same Paladin obtains a Deepwater Harpoon during the teens, it counts as 14/40 until level 20, at which point he gets the full 18/40 out of it. There aren't a lot of 30+ damage weapons out there in this era for the levels 20-30 cap to come into play very often.
Danth
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