Yeah as far as I know (only from reading, not experience) this spell does not give you xp or loot. I would assume it does have a level limit, and that the wiki is probably correct on that one. This spell would be too overpowered if it worked on any Undead Mob. This logic also falls in line with similar Dungeon and Dragons spells (Everquest was heavily influenced by Dungeons and Dragons). There were some spells that could instant kill a mob, but it had limitations. See
https://www.dndbeyond.com/spells/power-word-kill , which would instant kill anything under a certain HP.
I would imagine it is only really useful for emergencies, or killing mobs that don't really give loot anyway.
It is a bad example, but you could use this to kill the Pained Soul PH, because it is just a PH and doesn't drop any good loot. Even though it is a waste of money via the Star Ruby being consumed, you are saving the time of killing the PH. In some situations saving time killing a worthless mob may be worth the cost of a Star Ruby, especially if you are rich.
This is just theory crafting though, I haven't used the spell myself.