$level must be passed as an integer, not as a string.
The problem is with the plugin code:
if (count($labels) !== $level && $labels !== '') {
echo 'Category Chain Select Plugin</br>Error :: Number of labels don\'t match number of levels';
The !== operator requires a match on type as well as value. Had the author used != a string value for $level would match. The test for $titles uses == which does not check type.
if (count($titles) == $level) {
You might point out this inconsistency to the plugin author.