At any time you can press the right mouse button to bring up a small menu of short-cuts. This is useful if you are using the mouse and want to run one of the commands in the menu. The menu is kept short to make it fast to use and consists of the most common operations used when you are using the mouse.
If you choose format from this menu, it will format the paragraph that you clicked the right mouse button above, not the paragraph that the caret is presently at. (Clicking the right mouse button does not move the caret - clicking the left mouse button does that.)