The current way it is working is that all hit and expertise keep their full value from your piece's gear. For example if you have an item of high value hit/expertise such as Renataki's Soul Charm, at ilvl 522, it provides 1467 expertise, while the reforging portion that is scaled down to 463 allows 338 of another stat. This sounds extremely balanced for getting your hit caps with current gear and not losing them when your gear gets scaled down, however it also provides a slight balance problem for those with a naturally higher itemlevel.
If you were to step into the proving grounds with a 463 itemlevel, you would have to spend a large portion of your gear itemized towards getting that 6% hit cap for the proving grounds, while people in a 550 ilvl will take 4-5 pieces of gear with hit/expertise on that stat to instantly reach the cap. This gives a pretty large stat gain for those players over the casual 510-520 ilvl raiders that got their gear from the timeless isle. At my item level of 547 this saves me 1.5k worth of stats to place on other pieces of gear instead of points I would need to put into hit/expertise, which at this itemlevel is a large benefit to pushing more waves in endless.
The two possible solutions I can think of both have a downside, one being farming the right gear just for the proving grounds, though some of the top contenders already do that, and the other being having to reforge every time you come back from dungeons/raids and want to do proving grounds.
1. Give hit/expertise cap no matter what their current ratings are. This causes some large issues with just queueing up in the gear you have, but it is a more fixable solution for the players. While you won't have to get the best ilvl gear possible to do good numbers, you will have to farm gear with no hit/expertise on it just to maximize your stats anyways. This is a pretty bad solution, though I do enjoy the idea of farming up gear from heroics or lower tier raids to do better in the proving grounds.
2. Cause hit and expertise to also scale down, making it so that all gear is equally itemized (mostly, gem slots are always in your favor). This is a very expensive solution however, since anytime you want to switch between raid/dungeons/casual world stuff and Proving Grounds, you have to spend a couple hundred gold to fix your gear for the hit/expertise caps.
As you can imagine Solution 2 is the most balanced, however Solution 1 is the cheaper/more time consuming one, giving a bit of a grind for your gear to save you the money that Solution 2 would cost. The current way is the worst of the 3 in my opinion, because if you don't have access to that top-end raiding gear, you cannot get the best gear to maximize your stats, and are stuck with what you have.
Edit: I guess theres a solution 3, which is give everyone the exact same stats when they enter the proving grounds, but I imagine no one would enjoy the freedom, and be upset if they want to try something freaky like stacking 1 stat.