Thanks Zombie, there are a couple more screenshots, but all of them are really similar.
This mod is really simple, it is just a script called from the game timer that checks regularly if the soldiers are present (alive) and if they are not, it adds the character from the characters.txt file. That is the reason they loose all their experience, you get them in the state they are at the start of the game.
To get experienced soldiers later in the game would require to modify the characters.txt file to add copies of the characters with more exp. and to find a way to check the game time from the script so the better soldiers do not show up too soon (or you could just let everyone die in the first missions to get more powerful soldiers). There also is no way that i know to modify a soldier's exp. or trainings from a script.
It also can be seen as a strategic incentive so you don't let your soldiers die knowing you will get them back as they were (it is an ironmen mod after all, it's not meant to make the game easier, just to be playable this way).
But it is easy to level up a rookie later in the game. Just being in a mission gives experience, and you can just use your trained soldiers to down the nearby enemies to a red health bar and then send the rookie to "finish" them. He/She will be up to level 10-12 in a couple of missions if done right.