I imported the formats from an old chapter to the new chapter. I am assuming that this will ensure the paragraph format names are the same. Is that a good assumption?
Correct.
.... there is no option under Edit to Set up Table of Contents.
Ah. That suggests that the TOC file is not a "real" (generated) TOC file.
It may have been set up by generating a TOC, then copying and pasting back into an ordinary chapter file. Or, it may have been created by hand-crafting Xrefs. Or it may have been a generated file at one time, but lost that status due to an inelegant move/rename operation. These scenarios suggest that either the author didn't know how to build and care for an automagic TOC, or they had some unique formatting or content problem that prevented using a generated TOC.
You may have to make a backup of that file, delete it from the book, do an Add > Table of Contents to generate a new one, and import the formats from the failing TOC file.
But not yet. Allow some time for other remote crystal ball readings from other contributors here.
And is there anything odd about that TOC, like text trailing the entries that might be lost if auto-generated?