It has to do with spatial efficiency. In the majority of cases, if one is intending to use this tool to locate the context of the currently selected item, the nearer containers are going to be more desirable targets than the outer containers; “Chapter 23” instead of “Draft”. Placing them in an inverted order means more rapid access when using the mouse or, more importantly, keyboard arrow keys to select the container you’re looking for.
As for terminology, I feel “path” is the more precise term, as it describes a single “strain” within a hierarchy, pertinent to the selected item. This menu only describes one straight shot up through the full hierarchy, those containers directly involved with the selected item, its path. The term “hierarchy” is typically employed to describe the entire system, or at the least plural sub-components of it. But mainly we’re just taking a cue from OS convention here. The descriptor string for an item’s location in the hierarchy is always referred to as the path.