By reseting your lvl 100 skill back to 15 and making it legendary, how does this remove the overall leveling cap? Sorry im still pretty new to this. Are you still not maxed out at level 81 overall?

Because your overal rank does not reset. You just get more xp towards you overall rank by leveling up your new skill. thus going higher than 81

Ok so we can go higher then lvl 81 now?

Yes.

Also, it means you no longer have to use the skills that don't make sense for your character (Warrior with a 100 skill in Alteration for example) to get all the perks you wanted in your Warrior related skills.