The level1 and level2 queues must be public so the users can access them.
Note: Public: All users can see and access these queues, depending on their security role.
Users pick items from the queue. The items that a user picks are then moved to that user's personal queue.
Private: Access to these queues is assigned to specific users. (Members are defined on the queue record.) Users pick items from the queue. The items that a user picks are then moved to that user's personal queue.
Also:
In Customer Service, you can create two types of queues:
Private queues: Create with limited set of members to help those members easily view the queue items in that queue. Private queues streamline queue items for the members of that queue only and help to remove clutter from other user's views.
Public queues: Create to let everyone in the organization view the queue and all of its items.
Reference:
https://docs.microsoft.com/en-us/dynamics365/customer-service/set-up-queues-manage-activities-cases