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This flag does not have the meaning/behaviour me (and other colleagues) would expect. Expected behaviour: if checked it should change all tabs in a fixed number of spaces, if unchecked all the code should be indented with "hard" tabs. Now if I uncheck the flag I get spaces mixed with tabs which is a severe hindrance when you switch IDE (we run a hybrid environment with netbeans and eclipse) as different people use different tab sizes (typically 2-4-8). Because of this we already use the eclipse formatter for all sources except those that are auto generated by the form editor, our swing sources are by far less readable as people already gave up on having them look nice and won't car much about it.
IMHO the option should be ranamed. It should say "New Tabs" rather than "Tabs". Your idea that the whole file should be reformatted is a very bad one. I don't want anyone to try to change just one line and end up f***ing up the whole repository file just because they had their indentation settings wrong.
As far as I know the whole file IS already reformatted with current behaviuor. The fact that you already have most tabs converted to spaces is why you may have missed this. I am making a proposal exactly for this reason, those who use tabs should be able to use them well, just as those who use spaces. I guess netbeans devs enjoy spaces, well, I don't. :)
When this option is *unchecked*, pressing tab still inserts spaces instead of a hard tab. It seems that you can't type a tab and get a tab regardless of the setting.
Please note that tab only jumps to the next indentation level. If you have default settings - tabsize=8 and indentation level=4, you must press tab twice to insert single tab char.
Thanks to jiriprox, now it is fine with me. I used to have "Number of spaces to intend" = 4 and "Tab size" was 8. The "Expand Tab to spaces" was unchecked, but anyway when I pressed Tab, I get 4 spaces. But reducing "Tab size" to 4 solved the problem. Now I have "hard" tab as expected.
This made worse by the fact that there is no option to show invisible characters, so if you have some code that has been badly formatted with a mix of spaces and tabs, there's no way you can tell by looking at it. BBEdit has a nice solution to this - it shows spaces as a midline dot (UTF-8 C2B7), tabs as a small triangle and line breaks as a not sign (C2AC). These are displayed in a light grey, so they really don't interfere with coding. IMHO, using spaces for indents borders on criminal anyway!
This old bug may not be relevant anymore. If you can still reproduce it in 8.2 development builds please reopen this issue. Thanks for your cooperation, NetBeans IDE 8.2 Release Boss