Your post inspired me to do some testing and I am not seeing these results at all. I just killed Lydia and casted Dead Thrall on her. She was too powerful to be thralled and I entered Whiterun at level 3, and became the Thane with her in Breezehome by level 15. So there is more to the leveling than this.
This sounded awesome I went ahead and gave it a shot. Kharjo has been a weak follower of mine for quite some time. I did everything you said, got him to turn into a mudcrab, let it wear off, then had him follow me. I tried loading a new area, I tried waiting for him to go back to his original location, and everything else you suggested. He still dies and I can cast the expert reanimate on him the same as before. Doesn't even need Dead Thrall.
Were you trolling here?
no I am not trolling.
There is bug with followers, Their level increases BUT they DO NOT get ANY increase in HP, or any of their skills...thats why your Thall Spell works or don't work.
http://uesp.net/wiki/Skyrim:Followers (Read under folllower stats)
to test this, its simple.
1. Save your game. then dismiss Khjaro
2. Cast a lighting boltl spell on Kharjo and watch his HP meter and how much it goes down.
3. now save and Wabbajack Khjaro until he turns into a mudcrab, a rabbit, or a chicken.
4. if he reverts to his default gear it worked/
5. now cast the same lightening bolt on him....tou will see he has more HP and his meter doesn't decrease as much.
If you got lydia early in the game, she would be the best to try this on....it does work....i have tested here on 5 different followers and it does work.
As i said, their level goes up, but they gain no extra HP and their skills don't go up unless you Wabbajack them. housecarls can reach a max level of 50...most favor followers can get a max level of 30...MJoll gets level 40 and Jzargo is the only follower that can reach level 81...