Apologies, I wasn't aware you were asking for feedback.
The issue I described no longer occurs.
However, there is still a minor issue with the proposed fix.
After creating a new empty description list item by pressing {M-RET}
after a description list item, the item created is the following:
--8<---------------cut here---------------start------------->8---
- | ::
--8<---------------cut here---------------end--------------->8---
That is, "dash space <cursor> space colon colon".
After indenting, it becomes:
--8<---------------cut here---------------start------------->8---
- |::
--8<---------------cut here---------------end--------------->8---
That is, "dash space <cursor> colon colon". The space before the colon
is no longer present.