Macro for inserting a mini table between heading styles
Optimization:

You've done a good job of making sure you're not processing more than you have to, but there are a couple of things you can do here to improve performance. Instead of looping through all of the MiniTOCs you've just inserted, updating each one individually. Just update all of the fields in the entire document at once.

Replace This:

' Update all TOC fields in document
For Each currentTOC In ActiveDocument.TablesOfContents
     currentTOC.Range.Select
     currentTOC.Update
Next currentTOC


With This:

ActiveDocument.Fields.Update


It also turns out that there's no reason to  to check every paragraph's style. We can find them all. Below is the uber simplified logic that you would need to implement. Also note that subs/functions should have a verb-noun type name. I changed it in my example.

Private Sub test()
    InsertMiniTOCFields wdStyleHeading1, 3
End Sub

Public Sub InsertMiniTOCFields(headingStyle As WdBuiltinStyle, TOClevel As Long)
    Dim bookmarkRange As Range
    Dim bookmarkNumber As Long
    Dim currentRange As Range
    Dim insertRange As Range
    Dim doc As Document

    Set doc = ActiveDocument
    Set currentRange = doc.Range 'start with the whole doc as the current range

    With currentRange.Find
        .Forward = True         'move forward only
        .Style = headingStyle   'the style given as an argument
        .Execute                'update currentRange to next found instance

        Do While .Found

            ' code to insert bookmarks

            ' Add the TOC field
            Set insertRange = currentRange 'I changed this assignment from currentParagraph to currentRange
            insertRange.Collapse direction:=wdCollapseEnd
            ' Add the new TOC field
            doc.Fields.Add _
                Range:=insertRange, _
                Type:=wdFieldEmpty, _
                Text:=" TOC \h \o """ &amp; HeadingNumber &amp; "-" &amp; TOClevel &amp; """ \b TOCHeading" &amp; HeadingNumber &amp; "_" &amp; (bookmarkNumber + 1)
                bookmarkNumber = bookmarkNumber + 1

            ' update currentRange to next found instance
            .Execute
        Loop
    End With

    'update all newly inserted MiniTOCs
    doc.Fields.Update

End Sub


You can also turn screen updating off to pick up some more performance. You will need to introduce some error handling into your code if you decide to do that though. You'll want to make sure that screen updating is always turned back on when your sub exits; even if it errors. Truthfully, I imagine that this routine should really have an error handler anyway. Here is a pretty good error handling pattern to follow.

Other Notes:


You really shouldn't access the document with ActiveDocument each time. It's much better to store the reference in a variable. This way, you know for a fact that the document you started working on is the one you'll continue to work on.

Dim doc as Document
Set doc = ActiveDocument

Watch your line indentation. Ends should be at the same indentation
level as the If they belong to.
Instead of declaring HeadingNumber as a long in your sub
declaration, you should consider using WdBuiltInStyle.


So instead of this:

Sub MiniTOCFields(HeadingNumber As Long, TOCLevel As Long)  
    '......
    ' Check for occurrences of Heading X
     If currentParagraph.Style = "Heading " &amp; HeadingNumber Then


You would have this:

Sub MiniTOCFields(headingStyle As WdBuiltInStyle, TOCLevel As Long)  
    '......
    ' Check for occurrences of Heading X
     If currentParagraph.Style = headingStyle Then


You write pretty clean code. I like your variable names. Very concise and easily understandable. You use line continuations judiciously, but it can be a slippery slope. Be careful with that.