I would hope its not a permanent leveling, but it seems from the commentaries that it is. The problem with this is that several months after the game is out, most of the people will be hero status. So having a large battle where the majority of players are heros would defeat the purpose IMO.
It could be (and I think it is) a combination of class limits (which I understand there are) and leveling so if you reach a certain level you unlock the ability of heros but you can only have 2 per side or something. I saw a video that seemed to suggest you unlock the sniper gun in a similar fashion but there are still limits. That would be ok I guess, but then its going to be a "who can connect to the server fastest" race to pick the good classes.
I guess the latter if done, would be ok - not optimal, but I dont know how to do it any better. Class limits in any game have that problem anyway but not being able to set limits makes for boring camping matches or everyone runs around with the best classes possible making lower tier classes useless to include.
I guess my best suggestion would be to have a warmup time for everyone to connect. The best players from the previous round is given a prompt "you are chosen as the hero this round!" Then that player can either accept or reject moving it to the next best player if rejected (if they want to be nice or if there is a strategic reason for doing so). - But this way it is completely different from the way it will be.