It appears PHPStorm doesn't want to follow the code style I specified. Each time I format an HTML file, it collapses the indentation from this:
<html>
<head>
bleh
</head>
<body>
bleh
</body>
</html>
to
<html>
<head>
<bleh>
bleh
<bleh>
</head>
<body>
<bleh>
bleh
<bleh>
</body>
</html>
"bleh" (being all the contained tags) are indented how they're suppose to.
I found the setting: File -> Settings -> Code Style -> HTML -> Other -> "Do not indent children of".
That was filled with several tags which I have already removed (so the text field is empty).
The settings are theoretically applied to the Project scheme which is the current scheme.
However, I haven't fully grasped the concept of what these schemes are, so I may be missing something important.
Pictures:
http://snapshot.overloadproducts.com/7411c9d50e0b43edc76c1e625a38d61c
http://snapshot.overloadproducts.com/5a74f83356572f3644a6d52bf2fa1f66
Edit:
Opened PHPStorm the next day, and it said the project file had been edited externally, and it needed to refresh. Once it did, it was formatting correctly again.
So somehow the settings file was out of sync and the settings window wasn't saving to the file.
Still a bug in my opinion.