How do levels work in the outline view?

In outline view (A view that shows the headings of a document indented to represent their level in the document's structure. You can also use outline view to work with master documents.), you can reorder headings and text by moving them up or down, or you can promote (to change body text to a heading, or to change a heading to a higher level heading — for example, from Heading 6 to Heading 5.) or demote (to change a heading to body text or to a lower heading level — for example, to change from Heading 5 to Heading 6.) headings or text.

In order to see a document's structure in outline view, a document must be formatted with one of the built-in heading styles (heading style: Formatting applied to a heading. Microsoft Word has nine different built-in styles: Heading 1 through Heading 9.) or outline levels (Paragraph formatting you can use to assign a hierarchical level (Level 1 through Level 9) to paragraphs in your document.

If you select a heading that includes collapsed subordinate text, the collapsed text is also selected.