After extensive testing the PvP scaling at 120 seems to work as follows:
- The attacker sees his "regular" damage done, the same damage he would do to PvE targets or target dummies. Let's call this damage dealt.
- The target of the attack sees a different damage that is scaled (up or down) based on the HP difference between him and the attacker. The scaling factor seems to be linear and simply (targetbaseHP/attackerbaseHP). This scaled damage is the actual relevant damage, let's call this damage received.
In regard to secondaries: it is true that your distribution of secondaries now matters (in contrast to the fixed distribution with legion templates). This is most certainly a good change, since players now have control over the distribution and can therefore focus on specific secondaries (e.g., haste for casters).
However, almost everyone seems to think that the new scaling only applies to primary stats, i.e., a higher ilvl player still has an advantage because he simply has more secondaries than a lower ilvl one. This is wrong. The influence of secondaries on your damage/dps, whether it's a "direct" damage increase like mastery or an "indirect" one like the GCD reduction from haste, is already "baked into" the damage you deal, and is therefore also scaled by the scaling system. In other words: the damage scaling scales all of your damage, not just the fraction of your damage that is caused by your primary stat.
By the way, this system also means that damage meters will show incorrect data, since they will record the damage dealt (i.e., unscaled) for you, and the damage received (i.e., scaled) for everyone else.
Now, is this scaling system "fair"? Well, the system assumes that the relative damage increase from growing ilvl is equal to the increase in base HP. So if a player goes from 70k HP to 105k HP (= 50% increase) because of gear/ilvl upgrades , the system assumes that his damage goes up by 50% as well. If this is true, then the system works perfect and is indeed "fair". To which degree this is the case will vary from spec to spec, but it is at least a really good approximation.
TLDR: ilvl doesn't matter, concentrate on good azerite traits and a good distribution of secondaries.