This behaviour is desired. This was designed to have an easy way to remove an
indent. Other Word Processors also have this function and this was requested by
most users.

Closed.

But then, if you have two or more such paragraphs with the same indentation
(which is very common) and at the beginning of the second you hit backspace
twice, then the formatting is also gone for the first paragraph - which is not
desirable and not the behavior in Word.

Filed a request for a user option to turn this off: Issue 50050.

As a heavy user (Using OO to write manuscripts), I do a lot of joining and
spliting paragraphs. This leads to me hitting this 'functionality' a lot. I
would much prefer it to be an optional setting, and part of the 'autocorrect'
features. So I can switch it off.

Backspace removes also indents defined in the style that is assigned to the 
paragraph. This behavior is really stupid. When I use styles for indentation I 
don't want to be it overwritten by manual formatting simply by pressing 
backspace.

I don't know why users asked for this new behavior. It might be acceptable 
with manual indentation, but when you want to have a clean document only 
formatted with styles it is really annoying.

Please, remove it, or give us the option to turn it off.