These are the things once datamined a long time back. The reason it didn't work in Wrath dungeons explains this.
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if (PlayerLevel <= MaxPlayerLevel and
PlayerEquippedItemLevel > IntendedItemLevel) then
AlternateDamageTakenFactor = 1 - 0.01 * (PlayerEquippedItemLevel - IntendedItemLevel)
AlternateDamageDealtFactor = 1 + 5/3*0.01 * (PlayerEquippedItemLevel - IntendedItemLevel)
DamageTakenFactor = min(DamageTakenFactor, AlternateDamageTakenFactor)
DamageDealtFactor = max(DamageDealtFactor, AlternateDamageDealtFactor)
end
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Basically this looks to see if your player level is lower than or equal to the maxplayer level (80 for Wrath). If you aren't, no further actions are taken.
If so, it seeks if your equipped item level is above the intended item level (200 for Wrath). If so, the factors apply.
From there you can calculate your increased mitigation and damage done. (This also works in negatives if you are the max level for said dungeon's expansion.)
Nevertheless, I will now read through the rest. This is taken in the PvE perspective, ignore for PvP.
Your Crit chance should not be too high. 25% is enough, the rest can go in haste. This allows you to get 2-3 hits of Bloodthirst out with enough chance to get at least one of the to crit. (a 65% crit chance will be applied for Bloodthirst, the haste will determine how many hits you get out.)
65% is enough to Enrage every 2 hits, in bad luck streaks you always have Berserker Rage. Enrage is your factor for damage and needs to be up 100% as is increases your damage done by 15% total.
Versatility is indeed purely PvP. In PvE terms I would advice going haste or crit. I put mine on Haste so I can gather Crit using gems (The 2 +24 crit gems made me take it this way.)
Symandria,
Yes, Item level has a reduced effect in the outdoor world but I believe this is a minor bug. It only applies for characters of level 89 ad below and didn't have any effect during 6.0 live.
Nevertheless, I have tested said effects but I find they are not significant enough for me to prioritize Ilvl above stats. I admit I do have a confirmation bias towards prioritising stats simply because I despise the item level shenanigans.