To use an extreme example, when the President of the US goes into a small-town diner and chats with the "regular folks" there, he's not lowering his status. He's signaling, "My status is so high, I can pal around with whoever I want." Yes, this raises the status of those he talks to. (It also raises the President's status.)

This is not the best example because a president's institutionally granted power is a function of how likable and popular he is with the people. Imagine, however, that the president was more of a dictator and didn't need his citizen's approval. In this case, he'd be lowering his status by chatting with regular folk. He's signaling he still cares enough to chat with them despite having this unalterable power over them. Consequently, the citizens believe they must have some power over the dictator (however little).