That's very strange! I just re-added the test.zip to make sure and then converted to azw3 and I get this (note there are no nbsp characters):
<p class="poet"><sup class="vn" id="v01010002">2</sup>The sons<sup class="fnr"><a href="part0000.html#fn01010002a">1</a></sup> of Japheth:</p>
CSS:
.poet {
display: block;
text-align: left;
text-indent: 3%;
margin: 0 0 0 4em
}
Why the difference? I am running Win7 and using Calibre 1.21 64bit
Bruce