User blog comment:Jimeee/Skyrim 1.9 beta update adds Legendary difficulty and raises level cap (Updated Apr 8th)/@comment-76.184.77.13-20130305222420/@comment-24.5.218.93-20130305230029

It set's the skills level to 15, so your ability with that skill resets, however, your overall level does not changes, and you regain the perk points that you spent on that skill tree. After that, the skill tree will start to level up again and you will gain experience for your total level, which will in turn allow you to earn more perks. This new system allows you to gain more levels and get more perks, which effectively make your character more powerful.