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Be careful about large initial caps unless you're making books for only you to read on a known devices. Unfortunately readers that don't display them well don't just ignore them.
Also beware of deep indents. Reader screens at default font sizes are not wide. 'White space' layouts aren't effective. You just get nasty line-breaks and hyphenations.
Anyway, he doesn't want the WHOLE book indented, just the italic passage.
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