Feature request #1: it would be really cool if when you moused over the outline ribbon area, a tooltip would pop up to show you the parent text. That way you could maintain your context in a very big outline. This solves the problem of not knowing where you are if you are browsing/editing a big outline.
This is mockup is based on your Propædia discussion.
Feature request #2: You could also borrow features from code editors & IDEs that allow for “code folding.” If you click on the outline ribbon, it would collapse the parent bullet. This solves the problem of not being able to collapse the parent bullet when you are editing a child bullet. The problem exists if you are working on a very large document, so that the parent bullet may be off screen. Another user identified a similar problem.