It would be interesting to know the weather at the time of flight? Did he enter low scud cloud and was on top at 2000 and hence visual with terrain or in between cloud and visual? Or was he at 2000 and solid IMC ?
If he was visual and levelled temporally to get clarity incase ATC had wanted him to stop at 2000 but he could see the mountains that is different to blindly levelling at 2000 in IMC with a CFIT potential.
According to the Pilot’s Report Form “Our altitude climb instruction was “climb level Two Hundred”. We read back the clearance and began the departure. As we began to climb we had some confusion as to what the altitude clearance limit was as we were unsure what level Two Hundred meant. We levelled at Two Thousand feet to ensure we didn't exceed any altitude limits. We contacted departure control and informed them we were level, they questioned what altitude we were climbing through and we clarified that we were level. There was some question from ATC regarding what altitude we were cleared up to by Kerry and we informed the controller that we were unsure but were level at Two Thousand. He further cleared us to Flight Level Three Zero Zero and to expedite through Four Thousand Five Hundred, and we immediately began climbing. The flight continued on without incident”.
From this it looks like he took LEVEL as to be LEVEL not FL On ATC realising he was level at 2000 feet they then give a strange clearance to climb Flight level 300 from level 200 hardly a terrain avoidance clearance? itself a confusing response instead of expedite climb immediately to XYZ feet on 1002 (or whatever) read back with maybe a terrain warning ?
Historically there was confusion over Level with pilots saying " Level at FL270 ( example) and that was changed to " maintaining FL270" so as not to confuse the two and that appears the case in this situation where wrongly the pilot took LEVEL as to be LEVEL
Pace