I just tested this and the text is reformated when any checkbox is modified except the top two on the preference page. This is because ‘Lowercase HTML Tags’ really affects code assist, and not formatting. For reformatting to a different case of tags you need to select ‘Update HTML Tag Case’. The only reformatting settings that don’t cause a reformat of the text are changing the tab size or tab/space option. I’ve made an entry into our internal tracking system to get this issue addressed in the next service release. Thanks for bringing it to our attention.
–Scott
MyEclipse Support