Html ordered list 1.1, 1.2 (Nested counters and scope) not working

Uncheck "normalize CSS" - http://jsfiddle.net/qGCUk/3/ The CSS reset used in that defaults all list margins and paddings to 0

UPDATE http://jsfiddle.net/qGCUk/4/ - you have to include your sub-lists in your main <li>

ol {
  counter-reset: item
}
li {
  display: block
}
li:before {
  content: counters(item, ".") " ";
  counter-increment: item
}

<ol>
  <li>one</li>
  <li>two
    <ol>
      <li>two.one</li>
      <li>two.two</li>
      <li>two.three</li>
    </ol>
  </li>
  <li>three
    <ol>
      <li>three.one</li>
      <li>three.two
        <ol>
          <li>three.two.one</li>
          <li>three.two.two</li>
        </ol>
      </li>
    </ol>
  </li>
  <li>four</li>
</ol>

This is a great solution! With a few additional CSS rules you can format it just like an MS Word outline list with a hanging first line indent:

OL { 
  counter-reset: item; 
}
LI { 
  display: block; 
}
LI:before { 
  content: counters(item, ".") "."; 
  counter-increment: item; 
  padding-right:10px; 
  margin-left:-20px;
}

Check this out :

http://jsfiddle.net/PTbGc/

Your issue seems to have been fixed.

What shows up for me (under Chrome and Mac OS X)

1. one
2. two
  2.1. two.one
  2.2. two.two
  2.3. two.three
3. three
  3.1 three.one
  3.2 three.two
    3.2.1 three.two.one
    3.2.2 three.two.two
4. four

How I did it

Instead of :

<li>Item 1</li>
<li>Item 2</li>
   <ol>
        <li>Subitem 1</li>
        <li>Subitem 2</li>
   </ol>

Do :

<li>Item 1</li>
<li>Item 2
   <ol>
        <li>Subitem 1</li>
        <li>Subitem 2</li>
   </ol>
</li>

Use this style to change only the nested lists:

ol {
    counter-reset: item;
}

ol > li {
    counter-increment: item;
}

ol ol > li {
    display: block;
}

ol ol > li:before {
    content: counters(item, ".") ". ";
    margin-left: -20px;
}