[jasong]

I think it might be something other than indenting, as I'm unable to replicate the behavior. It might be with one of the View settings, I think the Next/Available/Remaining setting, as there is some screwy behavior about this:

1. Set your view bar to Ungrouped/Unsorted/Next/Any/All
2. Create a new project
3. Enter tasks, but don't bother with indenting them:
PROJECT
Task1
Subtask1
Task2
Task3

4. Select Subtask 1 and indent it (command-])
=> Task 1 gets the "action group" triangle and styling, but Subtask 1 is still at the same visual level as Task 1

5. Select Task 2 and 3 and indent them (commmand-])
=> The project gets rearranged so it looks like this
PROJECT
Task2
Task1
Subtask1
Task3

Task 1 and Subtask 1 both the action group triangle, but everything is visually on the same level.

6. Change from Next to Available or All, and the hierarchy is as you would expect now.