I was unaware of there being two different item levels, Equipped ilvl and Total ilvl. That explains what is happening.
As for the vendor part, I am wearing full heirloom set on a BM Hunter. With the Total ilvl aspect, that explains why it reported an ilvl change after I vendored trash gear.
Thank you for the explanation! I will use the code for now and will switched to Geared once it has the options I mentioned
here.