
This might be a naive question. However, I am just trying to understand why the tool tip says “Preserve” when actually it discards unnecessary white space.
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There is a misleading double negative here. The documentation you linked to says (emphasis mine):
It means that if
DisableFormattingis specified, insignificant white space will not be discarded, i.e. it will be preserved in the serialized output. So, the tooltip is right.