This is seriously confusing. And at least on Mac and iOS, it also goes against the system standard (see how Finder and Files does it). (EDIT, 2023-02-27: Actually, I think Files — and maybe iOS — just doesn’t use expanding folders.)
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Are there any plans to change this in future updates, or does this post’s relocation to FR imply it was intentional and here to stay?
In my opinion, the outline has lost some of its value as a quick reference.
In theory, left-justifying the text of #H1 with the dropdown arrow of #H2 seems reasonable as you’re aligning the first character of each row, but that discounts the effects of visual perception. The text chunks are perceptually grouped because they share similar qualities (shape, spacing, color, etc) and those groups are interpreted as vertical lines… lines which are no longer straight, which doesn’t accurately convey the hierarchy.
Slicing it another way: Bbb, Eee, Fff, Ggg, Hhh, and Iii are all almost aligned, even though they are a mix of h2 and h3. Meanwhile, Ccc, another h3, is way out on its own (and it’s almost aligned with Ddd, an h4…):