From Lodestone: Ask the Devs! (11/26/2010)
What happens if I equip a piece of gear, but am not the favored class or rank listed in the item details?
Equipping a piece of gear as anything other than the favored class or optimal rank effectively lowers the item's stats. The larger the gap between an item's optimal rank and the player's current rank, the greater this reduction will be. There are instances, therefore, when equipping a high-rank item will grant lower stats than a low-rank item that is closer to the player's rank.