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Looks like your epub reader has it's own ideas about paragraph spacing and first-line indents.
If you supply no styling, you'll always be at the mercy of your reader's settings/defaults. And even then, readers like Moon are often set to override a document's styling by default.
Use ADE to see if your epub is behaving the way you want it to. If it is, and your preferred reader app STILL doesn't show you what you expect to see, then you probably need to experiment with your reading app's various override settings.
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