Content Protect - post types protection is backwards?

Hi there,
I'm building a marketplace where users must register and be approved to see all content. I'd like to have two levels of protection:
Level 1 (registered user) - User has registered but still cannot access content.
Level 2 (approved user) - User has been manually upgraded to Level 2 once approved.

Right now, I have some dummy content. I've protected select pages, post types but allowed access on everything for Level 2.

Problem 1: Level 2 cannot access anything.
Problem 2: On the homepage, there are sections (like "Featured Products") that pull from custom post types. Level 1 can see these sections but Level 2 cannot. Seems backwards.

Any help is appreciated. I'm also using WooCommerce and WCVendors plugins and a 3rd party theme.