Ebook compiles as one single paragraph

My guess is that it has everything to do with this. If you did what it sounds like you did, then you don’t even have paragraphs in your book. You have one very long paragraph that has been manipulated to appear as though it is broken up into paragraphs. This was done by inserting large amounts of whitespace between some sentences, such that at one very specific and completely arbitrary layout, Scrivener’s text editor, it has the illusion of being broken up into paragraphs.

Change the width of the editor though, and the illusion is broken.

Or export to an ebook format where there is no such thing as a predictable width, and it will never work—not that it would ever work, since tabs are not something ebooks have any concept of. They are ignored. Generally speaking tabs are not an indenting tool, but that is especially true for ebooks.

So if all of the above is true, no amount of formatting in compile will fix this.