It's tinting by class, but not by level. On a 57 hunter, the books show up as usable but they are not until 60.

Let me know if this causes any errors for you.

Closing this as I haven't heard anything for almost four years now.

Pushed new version of the AlreadyKnown.lua to the repository that should be able to detect items that are above your level. I didn't tag this for release yet, because this is completely untested, since I don't have active subscription at the moment. Let me know if this causes any errors for you.

Please note the addon only tints items in MerchantFrame, AuctionHouseUI and GuildBankUI (not present in Classic) but not the items in your backbags like in the screenshot.