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Just like in City of Heroes, if you start a Story Arc in City of Villains you will always be allowed to finish it—even if you outlevel it.
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Incorrect. Hit 11 in the middle of an arc in COV and it grinds to a halt.
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I think that some of the confusion here stems from the fact that
the PO contact's "2nd arcs" are not really arcs. They do have
a story clue, as normal arcs do, but when you finish them, they
give no souvenir, only a temp power.
Mongoose's "arc" appears to be the same way, a series of linked
missions + story clue, but no souvenir (although some people
say it had one in beta, I don't remember there being one).
So, if you have the main (1st) arc, you can complete that even if
you outlevel it. If you are on one of the 2nd "fake arcs", they
will turn you away if you outlevel. I am about to test this out,
my mastermind is level 10.5, and I've managed to do bocor's
and billy's arcs and get their temp powers, but I'm only halfway
through vendetti's first arc. I should ding before I finish it, and
if he won't let me finish it, I will post here to retract my statement.