Fixes #95591

src/vs/editor/common/commands/shiftCommand.ts

@@ -103,14 +103,14 @@ export class ShiftCommand implements ICommand {
 		const { tabSize, indentSize, insertSpaces } = this._opts;
 		const shouldIndentEmptyLines = (startLine === endLine);
 
-		// if indenting or outdenting on a whitespace only line
-		if (this._selection.isEmpty()) {
-			if (/^\s*$/.test(model.getLineContent(startLine))) {
-				this._useLastEditRangeForCursorEndPosition = true;
+		if (this._opts.useTabStops) {
+			// if indenting or outdenting on a whitespace only line
+			if (this._selection.isEmpty()) {
+				if (/^\s*$/.test(model.getLineContent(startLine))) {
+					this._useLastEditRangeForCursorEndPosition = true;
+				}
 			}
-		}
 
-		if (this._opts.useTabStops) {
 			// keep track of previous line's "miss-alignment"
 			let previousLineExtraSpaces = 0, extraSpaces = 0;
 			for (let lineNumber = startLine; lineNumber <= endLine; lineNumber++, previousLineExtraSpaces = extraSpaces) {
@@ -188,6 +188,11 @@ export class ShiftCommand implements ICommand {
 			}
 		} else {
 
+			// if indenting or outdenting on a whitespace only line
+			if (!this._opts.isUnshift && this._selection.isEmpty() && model.getLineLength(startLine) === 0) {
+				this._useLastEditRangeForCursorEndPosition = true;
+			}
+
 			const oneIndent = (insertSpaces ? cachedStringRepeat(' ', indentSize) : '\t');
 
 			for (let lineNumber = startLine; lineNumber <= endLine; lineNumber++) {

src/vs/editor/contrib/linesOperations/test/linesOperations.test.ts

@@ -960,6 +960,25 @@ suite('Editor Contrib - Line Operations', () => {
 		model.dispose();
 	});
 
+	test('Indenting on empty line should move cursor', () => {
+		const model = createTextModel(
+			[
+				''
+			].join('\n')
+		);
+
+		withTestCodeEditor(null, { model: model, useTabStops: false }, (editor) => {
+			const indentLinesAction = new IndentLinesAction();
+			editor.setPosition(new Position(1, 1));
+
+			executeAction(indentLinesAction, editor);
+			assert.equal(model.getLineContent(1), '    ');
+			assert.deepEqual(editor.getSelection(), new Selection(1, 5, 1, 5));
+		});
+
+		model.dispose();
+	});
+
 	test('issue #62112: Delete line does not work properly when multiple cursors are on line', () => {
 		const TEXT = [
 			'a',

src/vs/editor/test/browser/controller/cursor.test.ts

@@ -1428,6 +1428,28 @@ suite('Editor Controller - Regression tests', () => {
 		model.dispose();
 	});
 
+	test('issue #95591: Unindenting moves cursor to beginning of line', () => {
+		let model = createTextModel(
+			[
+				'        '
+			].join('\n')
+		);
+
+		withTestCodeEditor(null, {
+			model: model,
+			useTabStops: false
+		}, (editor, cursor) => {
+			moveTo(cursor, 1, 9, false);
+			assertCursor(cursor, new Selection(1, 9, 1, 9));
+
+			CoreEditingCommands.Outdent.runEditorCommand(null, editor, null);
+			assert.equal(model.getLineContent(1), '    ');
+			assertCursor(cursor, new Selection(1, 5, 1, 5));
+		});
+
+		model.dispose();
+	});
+
 	test('Bug #16657: [editor] Tab on empty line of zero indentation moves cursor to position (1,1)', () => {
 		let model = createTextModel(
 			[