Outline View: Degraded manipulation of heading hierarchy in *.docx vs. *.doc

I saved from *.doc back to *.docx and could not replicate the problem.  The options were already as you described above in the new *.docx.  However, I went to another network where I had an *old* *.docx, i.e., before saving it to *.doc.  It also did not have the problem, and the settings were also as you described above.

Looks like this is an example of when the problem is spurious.  However, I know that this is not the first time that I ran into this behaviour, where the headings stop responding as they should in Outline View.  I make sure that the heading styles are in fact heading styles, and I also try to get rid of extraneous formatting using ctrl-space.  None of that helps when the problem occurs.  It looks like the solution might be to save to *.doc and then back to *.docx (crossing one's fingers and hoping that nothing important is lost).

Thanks for prompting me to explore that possible solution.

Hmm, the "Set left and first indent with tabs and backspaces" option is not tied to a particular document; it's a global setting in (your installation of) Word.

I have no idea why *.doc and *.docx behave differently on your system. Do you see a difference if you try the Alt+Shift+Left arrow and Alt+Shift+Right arrow keys instead?