Eclipse is very goofy about this, and it's something I loathed about using it (having recently switched to IntelliJ, which is better but not by an order of magnitude). In my experience, it will sometimes indent according to your settings, spaces or tabs, but at other times, based on some other setting that is in a different place than the first, it will indent based on the line previous to the one you are indenting. This results in a kind of slow creep of badly formatted code entering the codebase, if you have a lot of developers who don't care or don't know to check whitespace upon commit, and don't explicitly share a well-customized settings file.

At least IntelliJ has Emacs-style DWIM tab, but still has a whole host of problems with its better than Eclipse but still subpar editor.