[TxMt] Reformat paragraph inserting spaces

I use reformat paragraph a lot for reStructuredText. Normally the text is not indented so reformat paragraph works well. However, for lists and other things that are indented, reformat paragraph works unexpectedly. When I reformat a paragraph that is indented by a single tab the indented text is indented with spaces. So, the first line still contains the tab I inserted, but subsequent lines are indented with spaces. This of course causes issues with the reST parser.

My question, is this something I've screwed up in my settings or is this expected behavior? I expected whatever indent I started with to be copied to subsequent lines. Nothing turned up when I searched the mailing list. Any help is appreciated. Thanks _matt