Reproduction steps

1. Add one bullet point to a markdown file: - a
2. Add a newline
3. type - and Zed will automatically indent.

Current vs. Expected behavior

Currently, Zed will automatically indent, but I expect it to maintain the same indentation level.

I suspect this is a regression from:

• markdown: Don't adjust indentation when inserting with multiple cursors #40794

Zed version and system specs

Zed: v0.217.0+nightly.1988.d6241b17d35c4eae1d23dfbde16cae0eb8187ac2 (Zed Nightly d6241b1)
OS: macOS 26.1
Memory: 64 GiB
Architecture: aarch64

Attach Zed log file

Relevant Zed settings

(for AI issues) Model provider details

No response

If you are using WSL on Windows, what flavor of Linux are you using?

None