The why has to do with "spaghetti numbering." That is a term I first saw around 1998. It is specific to Word.

First take a look at the second link I gave you from Suzanne Barnhill. You have to do the work on indents in the MultiLevel Numbering dialog, not in Styles or ordinary paragraph formatting. Unless you tie your numbering to specific paragraph styles, though, you will can end up with a multiplicity of list templates that are described by that term. Then the numbering must be applied in your document by applying the styles, not by using the numbering buttons in the Home tab.

If you really want to understand numbering in Word, I wish you luck. Shauna's page is essentially the Dummys version of the first link below.

• Word's Numbering Explained by John McGhie (pdf)
• Numbering in Microsoft Word