Because a level 7 can be an AR on a step 5 game, so one step up would be step 4 (or step 3 as 4 and 3 are officiated by the same level officials).
The table only covers referees, ARs are covered in the text as below.
At least one of the two Assistant Referees or the Fourth Official (where appointed) shall also be deemed to have the ability to Referee a team from the level of the uppermost competition level of the two competing teams. This is important to ensure that there is sufficient cover, should the match Referee be taken ill or become injured.
That is a bit vague, but the way to look at it is what would happen if the L3 referee went down on a step 3 or 4 league game. There are no 4th officials, so the most experienced L4 AR would take over, therefore it can be assumed L4s are deemed to have the ability to referee the game if two step 3 / 4 teams are playing. What they don't want is a L3 or L4 in the middle with two L7s on the line, as they are nowhere near the required level and experience to take over if the referee gets injured.