Both, but not quite at the same time.

See, narrative scale applies to those without Legend, those who are not divine. Mere mortals, in other words. In Neall's example, if you have Epic Strength and you hit some palooka/mook/nobody, you'll put your fist right through them. If you hit someone with Legend, like another PC or an NPC Scion, you only get a bonus Enhancement. You won't have as big an effect because you're innately on an even playing field....