The macro uses Outline Levels which is a paragraph level format option associated with a style. Have you tried changing the Outline Levels of the styles involved?
In current versions of Word, it appears we can no longer change the outline level of the "Heading x" series of styles but there is nothing to stop you changing the 'Heading 3 TOC" style to either have or not have an outline level eg
Code:
ActiveDocument.Styles("Heading 3 TOC").ParagraphFormat.OutlineLevel = wdOutlineLevel1
'or
ActiveDocument.Styles("Heading 3 TOC").ParagraphFormat.OutlineLevel = wdOutlineLevelBodyText