I see. Thank you for your very helpful reply!

Philipp Kiefer <phil.kiefer@gmail.com> writes:

Do I understand you correctly that you mean tab should cycle visibility
in this case?

* headline
some text
CURSOR IS HERE
- a list

Yes, I suggested that in those cases, org-cycle should fold the subtree 
point is in, i. e. fold up to the next parent heading above.

To get this, just customize `org-cycle-emulate-tab' to nil.

Hm, for me, TAB does not currently seem to do any indenting anywhere in 
an Org file.

It just means that <TAB> is not configured to do anything in your Emacs.
By default, the Org's fallback is `org-cycle-emulate-tab' or whatever
global <TAB> is bound to.

If people use tab for indentation in Org out of the box when not on 
headings (which it has never done for me, I think), my suggestion would 
indeed be moot.

<TAB> does a lot of staff. Just read through `org-cycle' docstring.