pretty sure it was put in place to prevent players from just stacking the best gear and rolling the enemies with op custom units.

not sure where but the cap is in the code so if you find it you can change it. might want to ask on their official forum

If by "the way I wanted" you mean the absolute best gear from every category, then no, it's not possible.
Going for something thematic and stylish is still very much possible though.
If you didn't read this article yet, you may find it useful:
https://perisno.fandom.com/wiki/Custom_Mercenaries#Equipment
And the most important thing: don't pay attention to current quality until you give a soldier all the items that you want. Only when you see the final quality, then you can adjust some things, such as giving a weaker sword or a lower-quality barbute.