Each level in an outline numbering scheme has its own format. The level for
each heading is only the number, not the number with the additional text. If
you want level 2 headings also to include 'chapter', you have to put that
into the number format for the level 2 headings.

You need to make all the heading styles part of an outline-numbered list.
See http://www.shaunakelly.com/word/numbering/OutlineNumbering.html

If you've done this (or think you have) and what you get (a little hard to
be sure from your description) is this:

Chapter 1
1.1
2.1
3.1
Chapter 2
1.2
2.2
3.2, etc.

then what's happened is that the number fields for Levels 1 and 2 have
gotten reversed at Level 2. The easiest way to fix this is to delete
everything in the "Number format" box at Level 2 and put it back manually by
selecting Level 1 as the "Previous level number," typing any desired
punctuation, then setting the "Number style" (which will insert the Level 2
number), and typing any desired final punctuation.