Suppose 1st level intermediate cert specifies DNS=www.dev.com
Can 2nd level intermediate cert which is signed by the 1st level specify DNS=*.dev.com
or maybe DNS=*.dev2.com
?
Does certificate level affect SAN in any way?
In a given setup -- it is working configuration. Subject Alternative Names are constrained through different means -- Name Constraints extension in CA certificate. If you do not use Name Constraints, you can use whatever name you want in any certificate.