This really works. When I used to work at big tech, I had a reputation for being incredibly fast and this is the method I used.
This is also one of the reasons why I never moved away from Workflowy as an outlining tool. Nothing else has come close to it.
If I have to add one thing, it is that when you are recursively building your outline, it might grow really big and that might overwhelm you so I recommend a pruning step where you prune some of the nodes to make the overall outline tighter as a final step before proceeding on building. But do not worry too much and cut nodes ruthlessly. Often times you can get stuck at this point if you think too much.