Even before this fix, in 3.7.2, I no longer see the extra blank lines I reported in msg321135 either on Windows or macOS.  I did still see the persistent and expanding indents reported in the opening post.  I believe that this is what Raymond also referred to.  The one I could reproduce are now gone.  Hence, I close this.

Remaining newline and indent issues should be handled in other issues.

* I intend to review the initial PR for #32989 soon.  I don't know what its effect might be on the user-visible result.

* Too short indents for open fences needs a new issue.

* Blank line before SyntaxError: interactive python does this.

>>> d={a:'a}
  File "<stdin>", line 1
    d={a:'a}
           ^
SyntaxError: EOL while scanning string literal
>>>

The ^ line is nearly blank.  IDLE omits the line echo and ^ and adds a red highlight instead ... + an invisible indent on the next line (now too short). (It also color-codes the error message.)

>>> d={a:'a}<---red highlight to end of line...
   
SyntaxError: EOL while scanning string literal
>>>

Checking syntax first and skipping indent on error would give the following.  I don't know how easy this would be.

>>> d={a:'a}<---red highlight to end of line...
SyntaxError: EOL while scanning string literal
>>>