Do you experience it even after installing RLS(Rust Language Server)? We just follow the default rule of rustfmt, so I expect that must be configured well at least after installing the plugins if there is no special settings already.

I use https://github.com/rust-analyzer/rust-analyzer
Without this file it is inconvenient in the formatting part 🙂

No real need. Just make sure "editor.formatOnSave": true is in your workspace's .vscode/settings.json, and rustfmt will take care of the rest. (Remember to turn it off when you're working within the Lib/ directory, though.)

I think formatOnSave is a convenient tool but not the proper solution of the wrong indentation for editing itself. I wonder why it happens. I tried a bare vscode but didn't have that problem. So now I think you have some global indent configuration in vscode.

To test a bare vscode, stroke . key in anywhere of https://github.com/RustPython/RustPython/ . it will show a web version of vscode without much things.

I think #2897 is a reasonable support for this PR, though it only can fix the indent problem but not formatting itself.