This is actually a great idea. Want to compete to your best ability? Fine, but you're gonna earn much less xp. Want to level really quickly? Fine, but you are going to have a harder time. The added bonus is that those players who have no looms at all get more players that play without looms like them, while also allowing them to get their own looms quicker.
Perhaps a more nuanced system, to actually make looms a trade off.
Regardless of which level of loom:
0 loomed items = x2 xp
1 loomed item = x1.8 xp
2 loomed items = x1.6 xp
up to
5 loomed items = x1 xp
Edit: typo'd the number