• VSCode Version: Code 1.9.1 (f9d0c68, 2017-02-09T00:26:45.394Z)
• OS Version: Windows_NT ia32 10.0.14393

Steps to Reproduce:

1. Create an HTML document like below
   

2. Copy the nested-content div
   

3. Since we copied the spacing on the left (along with the text), we should be able to place our cursor to the very left and paste (or even just paste). Instead of the correct formatting we get something like this:
   

   or this (without moving the text cursor)
   

I assume this is an issue with the newer format feature, but I could be wrong.