Originally Posted by Strether
Unfortunately, it messes with the paragraph indentations so that any paragraph that begins with an italicized word or one in bold print will have an indentation that's different from all the other paragraphs.
I submitted a request for a bug fix a year ago, but I guess it doesn't have any kind of priority.
More likely it was just overlooked, sometimes a gentle reminder is required. I just looked at this bug, the Mobi you attached to that bug not is defining indents in a best practice way, it's using non-breaking spaces instead of the text-indent style.
There is an option under Heuristics called 'Replace Entity Indents with CSS Indents'. That function will correct docs with formatting such as your example in the next release.
I also explained the root cause of the problem in the original bug, it's possible that mobi output may be modified so that this gets fixed without any special options.