Sorry for being unclear, I'll try to rephrase what I am talking about.

Bastien wrote:
> So I guess you have (setq org-cycle-include-plain-lists nil), right?

It is set to integrate, but I tested it and it does not seem to matter.

> I'm not sure what "move to the parent level" really means here.

Sorry, again. I am talking about "nested" plain lists:

- "Parent" level
- Initial level for new item
-

At this point I created the empty item with M-RET. If I then press TAB, it demotes this item, which is also mentioned here: https://orgmode.org/org.html#Plain-Lists.

- "Parent" level
- Initial level for new item
-

So far, so good. But if I then press TAB again, we go back to this:

- "Parent" level
- Initial level for new item
-

Whereas I would expect it to move the item to this position:

- "Parent" level
- Initial level for new item
-

If it would do this, it would behave analogous to how it is implemented for headings, as described at https://orgmode.org/manual/Structure-Editing.html#Structure-Editing:

In a new entry with no text yet, the first TAB demotes the entry to become a child of the previous one. The next TAB makes it a parent, and so on, all the way to top level. Yet another TAB, and you are back to the initial level.

I am using Emacs 26.3 on Windows and this behaviour replicated on a clean install.

Thank you for your time!