@jsward
You video agrees with the diagnosis that I had earlier. I'm not saying this is the only place it happens, just that I have consistently been able to make it in the example you show.
Here's what I'm seeing:
If you have a nested list, then you are no longer able to hit space at the end of the item once you create the nested list. You are able to use the space at the end of the a secondary level in the list.
In your video, you saved it, but then went back to a different spot to start typing. The problem still exists, even after saving. You cannot type at the end of a list item that has a list nested within it.
In the following, the space bar works at the end of every line except for List level 1b, which is the first line numbered 2.

Here's what the HTML looks like. Note that the second ordered list (ol) element is part of the list item (li) element for List level 1b. I suspect it's trying to say "You don't need a space before an <ol> and so I'm going to take it out. Canvas used to put non-breaking spaces in all over the place, which was bad form. Now they won't allow you to put a space at all.
<ol>
<li>List level 1a</li>
<li>List level 1b
<ol>
<li>List level 2a</li>
<li>List level 2b</li>
</ol>
</li>
</ol>
While you're waiting on Canvas, here's what I do instead of going back and hitting spaces between all of the characters.
Type a period where it won't allow you to enter spaces (say at the end of list level 1b). Then left arrow so that the cursor is before the period. Now type and it will allow you to enter spaces. You can delete the period if needed once you're done.
What you really need to do is file a help ticket. This is a bug. Posts in the Community aren't entered into the bug tracking system, nor will it automatically bring more attention to the issue.
People being able to document the issue and exactly when it is happening in a help ticket has a better chance of getting it fixed. If people claim it's a mystery, then it appears to be more of an isolated situation. This is predictable and repeatable -- and buggy.
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