Courtney, I’m not sure all that is happening but it is normal behavior when moving tasks to become a sub-task of the task it is moved to. The existing outline level doesn’t come into place. If will then need to outdent the summary task if needed. As far as resequencing haphazard, I’m not sure why that is happening. Are you using a standard view/table that sequences by ID (you’re not sorting by something different)? You say hundreds of tasks. Does it work properly when you are moving fewer tasks? If so try breaking it into two moves. Maybe something is wrong with buffering tasks or cache. Is Project updated to latest release?
Anyway, a couple thoughts to try if you haven’t yet. Let me know if you find anything new.