I think I've found the problem.
I had "Remove indents at the beginning of lines" ticked. Unticking it gave me what I want. Now I don't understand why because I had no indents. It looks as though it affects the processing though.
So the TXT settings that are working are:
Paragraph Style: off
Formatting Style: markdown
Preserve spaces: unticked
Remove indents at the beginning of lines: unticked
|