I haven't played 996 yet so I've no idea what the actual 2-step process does specifically.
The first level of Badass cut the old one's benefits in half: 150% "decay max" and 1-tile knockback reduction. The second level gets you as high as it used to be.
I wanted to make Badass a two-step trait because it seemed a little unbalanced for the Marine to be able to get his full potential in one level-up, while the Scout and Technician were able to do it in two. There are some ideas in play that will (effectively) bring all of the advanced traits back to a more balanced level. (Also, given that quite a few master traits required Badass, it seemed appropriate to make it so that you had the option of "going further", rather than getting this huge boost while building up the master build.)