How to create a master document from an existing document

I have an existing doc with 3 levels of headings (there are 7 “chapters” using heading 1). I’d like to convert it to a master document and I’ve tried SEND - CREATE MASTER DOCUMENT. But what do I do with the STYLES pulldown menu in the dialog box that appears? No matter what I select, it creates 7 subfiles. I’d prefer to have each heading and subheading in its own subfile. So I guess this is 2 questions: (1) What does the STYLES pulldown do? and (2) can I save each subheading as a separate subdoc?

It seems to be a problem with the dialog itself. If I try it with the Window7 dialog, only Lever 1 works. But I have switched to LibreOffice dialogs in Tools > Options > LibreOffice > General. And for this dialog both “Outline: Level 2” and “Style: Heading 2” works. So please try it with LibreOffices own Load/Save dialog instead of system ones.