I'm currently leveling all the classes to 100, and i'm using invasions to gain the exp. I know when I see bosses, they usually have between 250k-400k, with the commanders at 1mil+. My spells/abilities hit for 1200-5000 depending on the class(at level 65ish). If a 100 is hitting the same mob-what do they see, and how is our damaged compared? I mean, are they hitting for 4k on my 250k mob, or am I hitting for 100k on their 8million hp mob?
There's no technical source for this, but the intention of the devs is to go for %.
If you hit a mob at lower level and deduct around 10% hp overall the level 100 mob will lose 10% hp as well (similar to scaling up your damage server side). The same counts for all participants (friend and foe) life* and attacks. They're scaled down to your level, but only for you. Everyone sees everything scaled to their own level. The scaling is not perfect, so some mobs might hit pretty hard, but Blizzards keeps pushing hotfixes for this.
In numbers: You hit a 100k hp mob for 10k damage. The level 100 version of that mob with 1m hp would then lose 100k hp. You just can't see it, because your mob only has 10k hp.
You can see a similar effect in timewalker dungeons and as of next week in all Legion zones.
* Only the life loss and gain infight. The actual hp numbers of players are real.
PS: Mind controlled people don't scale. So a lvl 100 will always slap you to death, if you're a few lvl behind.