The article at
http://word.mvps.org/FAQs/Formatting/WholeDocumentReformatted.htm
explains why bullets are applied to the entire document.
Note, however, that the safe way to apply bullet or numbering
formatting to text is to use styles. For single-level bullets you can
use the List Bullet style. Similarly, for single-level numbers you can
use the List Number style.
The List Bullet style can be applied very easily: just click
CTRL+SHIFT+L. If you need a different built-in bulleted style or a
numbered style, do the following: Hold the SHIFT key and click the
arrow next to the Style box on the Formatting toolbar; Word will
display all styles, and you can pick the one that suits you.
For outline numbering, follow the instructions at
http://www.shaunakelly.com/word/OutlineNumbering.html.