This format is useful when you are taking notes on one subject at a time, or when you are trying to organize something into different categories. You would start with an initial topic like this
How to take notes
Then you would add the subject that had to do with taking notes
How to take notes
Methods for organizing notes
How to keep notes concise
How to make notes memorable/easy to recall
For each of these subjects you would add more subjects that stemmed from them
You may also want to come up with a way to organize your outline format.
An example would be
1.(number) Initial subject
A.(letter)Subheading
I.(roman numeral) sub subheading
for the first initial subject you would use the number 1, and for each additional subject you would add 1 to the number. In this way you would not get lost when looking at your notes.