How does that work for middle schools that have blocked schedules?

Unless your child is gifted in languages, I'd have them retake level 2 in 8th grade and do supplemental classes outside of school to stay ahead. Otherwise you're choosing a very difficult path if you want them to stay in the same language for all 4 years of high school (which some colleges like to see)

8th grade: level 3
9th grade: level 4
10th grade: level 5
11th grade: AP language
12th grade: AP literature

At least this is the path for my DC who was mis-enrolled in Spanish 1 instead of Spanish 1A as a 6th grader and I didn't realize until 7th grade course enrollment.