Without more details on the input and output, this should work. Of note is that the variable name is on the root, to allow all templates to access it. but since there appears to be one XSl per chapter this shouldn't be a problem.
<xsl:stylesheet version="1.0" xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
<xsl:variable name="capnr">
<xsl:number value="3" format="1."/>
</xsl:variable>
<xsl:template match="/">
<html>
<head>
<title>Table of Contents, Chapter 3</title>
</head>
<body>
<xsl:apply-templates/>
</body>
</html>
</xsl:template>
<xsl:template match="chapter">
<h1>
<xsl:value-of select="$capnr"/>
<xsl:value-of select="@title"/>
</h1>
<ol><xsl:apply-templates/></ol>
</xsl:template>
<xsl:template match="section">
<li>
<xsl:value-of select="$capnr"/>
<xsl:value-of select="position()"/>
<xsl:text> - </xsl:text>
<xsl:value-of select="@title"/>
<ol><xsl:apply-templates/></ol>
</li>
</xsl:template>
<xsl:template match="paragraph">
<li>
<xsl:value-of select="$capnr"/>
<xsl:value-of select="count(../preceding-sibling::*) + 1"/>
<xsl:text>.</xsl:text>
<xsl:value-of select="position()"/>
<xsl:text> - </xsl:text>
<xsl:value-of select="@title"/>
<ol><xsl:apply-templates/></ol>
</li>
</xsl:template>
</xsl:stylesheet>
The above when applied to the given input XMl gives:
<html>
<head>
<title>Table of Contents, Chapter 3</title>
</head>
<body>
<h1>3.Chapter 3: Expressions</h1>
<ol><li>3.1 - Variables<ol><li>3.1.1 - Simple variables<ol></ol>
</li>
<li>3.1.2 - Text variables<ol></ol>
</li>
<li>3.1.3 - Remote identifiers<ol></ol>
</li>
</ol>
</li>
<li>3.2 - The logical operators<ol><li>3.2.1 - Precedence of Boolean operators<ol></ol>
</li>
</ol>
</li>
<li>3.3 - Designational expressions<ol></ol>
</li>
</ol>
</body>
</html>