Thanks @iamnithesh for sharing this.
I didn’t find anything in the document either. There are questions asked about making custom user levels as entitlements, no response from SailPoint PM yet. You can also follow it here: New Capability: Custom User Levels - Announcements / Product News - SailPoint Developer Community
However, I would like to request you to try this and let me know. What if you add your custom user level to a user manually and perform Account Aggregation, does the level promote as an entitlement.
Not sure if you tried it already, still checking and thank you as I do not need to test this from scratch 