I don't like to play falco against players just learning the game because I feel like lasers shut down too many options for movement and restrict them too much, I feel like they won't get better as quickly playing against falco. But I like to play marth against people who start because they have to learn spacing really well and deal with his beast grab.
Also, if you play ON HIS LEVEL that could mean 2 different things...
It could mean you sandbag to hell and just don't try, or it could mean you absolutely expect him not to respond correctly to stuff and you can **** him extra hard because you don't have to hold back. He's not going to shield grab you, etc. you can just go in there extra hard and be super aggro, and basically suffocate him with offense. Don't let him even breathe and restrict his movement, take away his options and punish every mistake (and there will be tons).
If you're talking about the second one, where you play specifically to his skill level as in you know he won't take advantage of anything, then he's not going to get better either and he may get turned off. I like to not go beast mode, I will pass up opportunities I know I have, but keep my spacing and let him move and attempt to press offense at times. If I get a shield grab, I let him know every time.. so he realizes how important an aspect it is and soon WANTS to learn how to L cancel, etc. I focus more on coaching than just my own play, but I have to keep good spacing or else they aren't learning the game properly. If they do stupid moves I'll let them know, this move is recovery only, or don't spam F-smash all the time I will shield grab it every time if its predictable. Change your timing because I just spot dodged or dash danced to avoid it because I knew exactly when you would attack. If I'm baiting, I let them know that I baited it because I knew how they would respond. Then maybe they will start to learn whats going on in MY head when playing and they can start to add things to how they play.
I tone my game down but concentrate on the learning aspect which is quite different I guess than sandbagging. To me, sandbagging is like... either you aren't trying or if you feel like you are better than someone and SHOULD be winning, but you ****ed up things here or there or SDed etc. and its closer than it should be. Like if you try your *** off and do awesome rreads and combo the **** out of him and kill him. Then you SD and its back to even, sometimes you feel like... whatever, I don't even care. And that mentality that you get, is at the heart of sandbagging. Like you are OWED the win because you think you are the better player. But really the game doesn't give a **** about what your johns are so, yea. Sandbagging is when you get discouraged and just start not caring in the match, and not trying anymore.
Also the hell with people who say sandbagging is using a character that isn't your best, as long as you are trying your best to win with that character then whatever. If its tourney and they want to get better with a character then that's their choice. The big thing is if they are trying or not. I feel like if you are coaching new players its vital they learn to play against as many different matchups as they can. They improve at a faster pace it seems, instead of just learning HOW YOU PLAY THAT ONE CHARACTER. I've had players that previously learned how to play against my falco or ganondorf pretty well.. but it was just because they learned how I play. If they played people much worse than me, people I would **** into an early grave, they would lose or hold even when they should be simply capitalizing on the players weaknesses. The problem was that they learned one or two matchups, not that they learned how to play in general. How to take advantage of their obvious weaknesses. I think that when a player plays like that, he isn't thinking and observing as much as he should be, so I concentrate on expanding my own arsenal as well for their sake.