David, see below
I ran a little test, and it seems to work OK with a bulleted list.
I didn't say it happened with a list, bulleted or numbered or otherwise. I said it happens when indenting a line.
One more observation. There are four buttons to control ordered and unordered lists. Were you using the style selection buttons (first row on the editing toolbar) or just the Indent / outdent buttons on the second row?
As I said, indented and indented twice, not creating a list.
I don't recall mentioning ordering a list. I can't even order from a menu online, no less a list.
Also, you mentioned <p> and </p> tags
The issue, maybe described more plain-speakly, is that once a line is indented, any additional line, added by entering a <CR> [i.e., <br />] can never be outdented or indented independently from the original indent.
Or more plain-speakly, added lines can never be "unglued from" the indented paragraph.
It seems that a line added in, should be able to be padded/unpadded independently from a line that was originally indented above it.
Or, i.e. (as WORD does) a <CR><CR> should enter a <p />, not just a <br /><br />.