Unless I'm greatly misunderstanding him, he's saying that the following are true:
1. He started at level 16, much further along in the game than the person he played with. HE was ahead, not his friend.
2. He then played for a while, saved, and quit.
3. He came back to the game, saw the save file with the new (correct) timestamp, indicating that it had saved his progress.
4. He checked the file, only to discover that he had gained no levels, and lost all the cool guns he got during laying co-op.
I don't think he meant it was an issue of just not getting credit for quests or quest items due to someone else being ahead in the game. It was an issue of losing all the EXP and guns he had gained during a play session. (correct me if any of this is wrong, of course)