Hello Noh Future,
Yes, someone made a lvl 1 challenge using the mod and, to my great surprise, managed to finish it, including optional bosses and even the Friendly Yan (while he is considered impossible in vanilla, his changes make him beatable at lvl 1 in the mod).
The guy is LightChaosman. He used a slightly different version of the mod that you can find
here (it was built with the v4.3 of the mod, so there are a few bugs that were not fixed at the time and it is US language only). I didn't remove the exp of the various fights that he mentions in his post because they are useful for normal playthrough, so if you don't use his version, you can do a lvl 1 challenge except for Blank and Beatrix (the Pandemonium fights don't give exp anymore anyway). If you use his version (or manually remove the exp yourself), Beatrix can also be kept at lvl 1 until the end.
His mastery of the game's mechanics is impressive though. I didn't see the record of all his fights but the few ones I've seen used chirurgical precision ^^
Also, I was quite sure that neither Necron or Ozma were beatable at lvl 1 because they are the two bosses for which I planned a bit of grinding in normal playthroughs. He proved me wrong for both even though it required a big amount of luck and retries.
In any case, good luck ^^