I believe you have already defined a "one-many relationship" on the tables Proposals(parent) and Line Items(Child). If not define that relationship.
Step 2:
On table Proposals Go to -> settings -> Relationships -> click on the relationship defined between the tables.
Step 3:
On Master Table Proposals -> click on "Add Summary Field" -> on the next window leave the default selection to create "# of Proposals" field.
Step 4:
On Line Items table -> click on "Add Lookup Fields" -> on the next window select the "# of Proposals" field from the Proposals table and click on Create (name it as "Total Line Items Count").
Step 5:
On Line Items table -> create a field "Line Item Number" -> type formula numeric and name it as "Line Item Number" or anything you want.
Step 6:
On table Line Items Go to -> settings -> Forms -> Go to the form and "Dynamic Form Rules" tab.
Add a new rule using "Add New Rule"
When
The record -> Saved
Action
Change -> "Line Item Number" (field you created int step 5) to lookup field (Total Line Items Count) you created in step 4.
Conclusion:
With this settings Line Item Number will have the numbering you are expecting for.
