Surprising Behavior--Bug?

In the following document at the top, the second line ends with a space and a paragraph change

I find that if I delete the space at the end of that line, the line is moved closer to the line above it (as seen in the document at the bottom). Since these are set to Compile as is, the result is seen in the compiled result.

Why does changing a character at the end of a line change the spacing as it does here?