I do regularly separate using levels down to 100's of feet
You ain't been controlling me or any other aircraft I've been on the R/T with in tha last 31 years: I have never heard an ATC clear an aircraft, on the basis of a "left" report from another aircraft, to anything other than a whole 500ft level. If I have, it certainly happens so infrequently I can't remember. I must have dumped that byte a long time ago.