Understanding "Reformat on paste" and "smart indent pasted lines"

I want to understand the expected outcome with "reformat on paste" and "smart indent pasted lines".

 

Using the following settings

I want to copy line 355 to 359.

I highlight the line and hit CTRL-C

I put the cursor at the end of line 359 and hit CTRL-V. The line de-indents in a way not expected.

 

 

Setting reformat on paste to None has no change in affect.

 

If I disable smart indent pasted lines...

The line pastes where I expect it to

 

So my question is, what is smart indent doing?  Am I witnessing a bug or do I simply not understand how it is supposed to work?

 

 

 

 

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Reading the help page would lead me to believe the affects of this setting are perhaps inverted.

Smart indent pasted lines If this check box is selected, the pasted lines are indented relative to the current caret location. Otherwise, the pasted lines are indented relative to the first column.
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PyCharm is awesome but I must say this "Smart indent pasted lines" is not smart at all. Who wants to have to type tab to desired indent level when they paste something? I finally turned it off, which then pastes as-is. However, if you then turn on the Reformat on Paste, it works quite nicely, i.e. as one would expect it to. 

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