Yes that's exactly what I wanted. Why can't it work for me? Here is the setting I used, as cut and pasted into this post.
(1) This under "Detect Structure: Detect Chapters at(xpath expression)
//*[((name()='h1' or name()='h2' or name()='h3') and re:test(., 'chapter|book|section|part\s+', 'i')) or @class = 'chapter']
All I did was add "or name()='h3' to the default line.
(2) In "Table of Contents" I just added //h3
(3) in Text Input I checked "Use Markdown"
Isn't this the same as you and Kovid said was what to do?