Auto indentation in Gedit

The auto indentation might not actually be what you think it is. It isn't "smart indentation;" it simply maintains the indentation on the next line. For example, if you were to have a line indented with four spaces, with auto indentation the next line will also have four spaces. Without auto indentation, the next line would return to the beginning.

You will need to manually indent the first line in a block of code that should be indented. Subsequent lines will automatically be indented by the same number of spaces or tabs as this first line.

Of course if you are already doing this, then you have uncovered a bug which should be reported!