Set VS code settings "editor.insertSpaces" and "editor.detectIndentation" to false.
Create a new text file and insert three lines like this:
A
B
C
Select the first two lines and ensure the cursor is on the beginning of the third line (in other words, the selection must include a trailing newline character).
Press tab to increase indentation of the selected lines a few times.
Expected outcome
Tab characters are displayed inside the selection for each additional level of indentation.
Actual outcome
The additional indentation levels do not cause new tab characters to be displayed. After changing the selection, the tab characters appear correctly.
Reproduction steps
Expected outcome
Tab characters are displayed inside the selection for each additional level of indentation.
Actual outcome
The additional indentation levels do not cause new tab characters to be displayed. After changing the selection, the tab characters appear correctly.