This is not a topic that I've ever thought about wrt our homeschool. I think it is only an issue if you use cyberschools or "a grade in a box" curriculum. I report Ben and Shira as being in second grade but none of the work they do is actually on second grade. I'm not sure what grade level they work at and don't particularly care as long as they show a consistent growth and mastery of the subject matter.
I know that cyberschools fill an important need in the community but I hate how they box the children in. I'd hate to have to deal with external people over what I teach my children. I love the freedom we have to pick up a tool and discard it if it doesn't work for us. I love the freedom we have to work on a subject almost exclusively for weeks on end and then ignore it for as long as we wish. Cyberschools don't give you that freedom.