I’ve logged this for the formatter. When using Tabs instead of Spaces for indenting the post-formatting offset returned for the pre-formatted caret position is incorrect. It appears to assume that spaces are used for formatting.
There’s no way to retroactively fix your version of Toad and the only workaround is to change your formatter options to use Space instead of Tab. On the Formatter page in Options the setting is under the Spacing|Tabs node.
I also see that you have mixed tab settings. You have the Formatter configured to use Tabs, but the Editor is set to use Spaces (on the Editor|Behavior page in Options). Ideally you should have the settings matched. Toad 12.10 removes the Tab settings in Formatter options and your Editor tab settings are used so it’s less confusing.
Michael