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Clustering levelClustering level - is a minimum number of matches (clustering degree) required to trigger grouping of two keywords. For example, you've selected a grouping level 2 - the tool will look for two matching documents in SERP and band up such keywords together.
A chance to have 1-2-3 matching documents in SERP is much higher than having 9-10 matching documents. That's why clustering with a lower clustering level produces less groups with more keywords in every group. On the opposite, if you select level 8-9 or 10, you'll get many groups with a few keywords in every group.