Weird numbering heading behaviour

I searched a lot, but I can't find something that fixes this.

I'm using Word 2013 to edit it, though I already used 2010 to edit it sooner.

I have this item, 2.4. Right clicked it on the heading menu and "Add Sub Heading", and it outputs a 4 instead of 2.4.1, not to mention it's coming with really crazy formatting(bigger margin on all sides as the images below are showing). What can fix the formatting issue and the wrong number?