In the attached screenshot, I am trying to C-x r o a rect. of width 4.
The intention is to indent the whole snippet to column 4.

Now, if you move the cursor vertically down (and subsequently in the
horizontal direction), you will note that the highlighted region
"forcibly" becomes zero width or of 8 chars.

I can in no way rest the cursor at col. 4 (on a row that has the tabs)

Note that the buffer in whitespace mode suggest the presence of tabs.

--8<---------------cut here---------------start------------->8---
(require 'diminish)
(add-hook 'emacs-lisp-mode-hook
	  (lambda nil
	    (setq mode-name "")
	    (mapc (lambda (m) (ignore-errors (diminish m)))
		  '(hi-lock-mode eldoc-post-insert-mode outline-minor-mode))))
--8<---------------cut here---------------end--------------->8---