From a personal point of view, this may be very subjective. Some use
<TAB>s, others use
<space>s, and any combination of them. I think you might find very different styles of indentation if you start looking a different authors's
.sty files on CTAN. My feeling is that the indentation should reflect nesting horizontally, and perhaps grouping vertically. In both instances this defines some structure within the code.
From TeX's point of view, this is irrelevant in most cases. That is, unless the category codes have changed. In particular, the
verbatim environment, where spaces are treated as spaces; even consecutive ones.
From the TeX Book (Chapter 8: The Characters You Type, p 46 onward):
The input to TeX is a sequence of "lines." Whenever TeX is reading a
line of text from a file, or a line of text that you entered directly
on your terminal, the computer's reading apparatus is in one of three
N: Beginning a new line;
M: Middle of a line;
S: Skipping blanks.
... If TeX sees an end-of-line character (category 5), it throws away
any other information that might remain on the current line. Then if
TeX is in state
N (new line), the end-of-line character is converted
to the control sequence token
\par (end of paragraph); if TeX is in
M (mid-line), the end-of-line character is converted to a
token for character 32 of category 10 (
<space>); and if TeX is in
S (skipping blanks), the end-of-line character is simply
... If TeX sees a character of category 10 (
<space>), the action depends
on the current state. If TeX is in state
S, the character is
simply passed by, and TeX remains in the same state. Otherwise TeX is
M; the character is converted to a token of category 10
whose character code is 32, and TeX enters state
S. The character
code in a space token is always 32.
The last two paragraphs are most telling of how TeX handles vertical and horizontal white space (respectively) within the code, allowing one to tailor your code to your own liking pretty much. Literally, TeX is just "skipping blanks".