What’s Revocation

No, there is no downside. In fact, its a very handy way of getting some early skill points by switching jobs and leveling up very fast by hunting metal slimes, metal medleys, lmses, etc. (When you switch jobs you keep all unspent sklil points)

As for revocation, it is completely different, once you beat the game, you can revocate a character once it is at level 99 in a class. It resets that character to level 1 in that class, but you keep the skill points you have earned. Revocating is the only way to max out all your skills since reaching level 99 in all classes does not give you enough skill points to do so.

Revocating also has another benefit: it improves the chances of getting a higher quality treasure map when you complete a dungeon.

Technically speaking, that'd be the Dreamseeker. Obtained after defeating the Dream Devourer, it boasts an attack power of 240 (to Rainbows 220), and crit rate of 90% (Rainbow's crit chance is 70%). In order to obtain it, you'll need to defeat the Dream Devourer, let the credits roll, and create a new save file. When you start your next New Game+, Chrono will have the weapon.

Practically however, since Attack Power caps at 255, you may find other weapons with different effects to be more desirable once you're at a level of power at which you can acquire the Dreamseeker in the first place.