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I’m not sure if this is also a problem in html files, too, however, when in a jsp I would expect that the formatter would honor the Common Editor/Print Margin Width. Also the link, meta, script tags that are under <head> do not indent. Also, <table> does not indent under <body>.
All known issues. The formatter won’t be enhanced for 4.0 (unfortunately it’s a beast) but we have spent quite a while fixing up the cases where it is possible that the formatter can corrupt your page content. Hopefully for 5.0 we will get time to actually enhance it’s behavior. Sorry for the inconvenience.