First off: I am using Lycanites 2.0.0.9 and LevelUp! 1.1.23. After checking on both open and closed issues, I saw no mention of this issue, so I believe it is still present despite me being on an outdated version.

The bug/incompatibility is in regards to the penetration effect from using equipment from Lycanites, more specifically penetration stength 3, when used after levelling up "Melee damage" in LevelUp. All attacks after the 1st attack will stop dealing damage when this skill has been levelled up. This does not occur when using weaker penetration (such as a xahpan base level 1 and 2), but only when using penetration strength 3 (vespine and xaphan level 3). I will post this same issue to the Lycanites page, and hope it perhaps have been (unintentioanlly?) fixed since the version I am using. I became aware of the issue through playing the RLCraft modpack.