Version:           2.5.0 (using KDE 3.5.0, compiled sources)
Compiler:          Target: i686-pc-linux-gnu
OS:                Linux (i686) release 2.6.15

I edit the following xml file (it is in one line):

<apache:RootElement xmlns:apache="http://www.apache.org/ns/#app1">
<apache:foo Id="objetivo"><xenc:EncryptedData xmlns:xenc="http://www.w3.org/2001/04/xmlenc#" Type="http://www.w3.org/2001/04/xmlenc#Content"><xenc:EncryptionMethod xmlns:xenc="http://www.w3.org/2001/04/xmlenc#" Algorithm="http://www.w3.org/2001/04/xmlenc#aes128-cbc"/><ds:KeyInfo xmlns:ds="http://www.w3.org/2000/09/xmldsig#">
<xenc:EncryptedKey xmlns:xenc="http://www.w3.org/2001/04/xmlenc#"><xenc:EncryptionMethod xmlns:xenc="http://www.w3.org/2001/04/xmlenc#" Algorithm="http://www.w3.org/2001/04/xmlenc#kw-tripledes"/><xenc:CipherData xmlns:xenc="http://www.w3.org/2001/04/xmlenc#"><xenc:CipherValue xmlns:xenc="http://www.w3.org/2001/04/xmlenc#">pviW8o51qF7f4OuIPxHqUnOmzvxpi6s97aY2CBaht9o=</xenc:CipherValue></xenc:CipherData></xenc:EncryptedKey></ds:KeyInfo><xenc:CipherData xmlns:xenc="http://www.w3.org/2001/04/xmlenc#"><xenc:CipherValue xmlns:xenc="http://www.w3.org/2001/04/xmlenc#">9pivy7b6+R+0VnF0H3C7hgdk1VG3iFJ26NT/16ekXioEJqJwwnGRavD9qLnOn+wV</xenc:CipherValue></xenc:CipherData></xenc:EncryptedData></apache:foo>
</apache:RootElement>

Then I put new lines and let kate indent it in orden.
The element <xenc:EncryptedKey is manually indented with two tabulators, then continue breaking the xml.
When is the time for the element </xenc:CipherValue>
kate crash with the following backtrace:

Using host libthread_db library "/lib/libthread_db.so.1".
[Thread debugging using libthread_db enabled]
[New Thread -1233385808 (LWP 26339)]
[KCrash handler]
#7  0xb7258793 in QGArray::find () from /usr/lib/qt3.1/lib/libqt-mt.so.3
#8  0xb6169577 in KateCodeFoldingTree::removeEnding ()
   from /usr/kde3/lib/kde3/libkatepart.so
#9  0xb616bb87 in KateCodeFoldingTree::cleanupUnneededNodes ()
   from /usr/kde3/lib/kde3/libkatepart.so
#10 0xb616c1b2 in KateCodeFoldingTree::updateLine ()
   from /usr/kde3/lib/kde3/libkatepart.so
#11 0xb60d6521 in KateBuffer::doHighlight ()
   from /usr/kde3/lib/kde3/libkatepart.so
#12 0xb60d8cf4 in KateBuffer::editEnd ()
   from /usr/kde3/lib/kde3/libkatepart.so
#13 0xb61142fe in KateDocument::editEnd ()
   from /usr/kde3/lib/kde3/libkatepart.so
#14 0xb6102b54 in KateDocument::newLine ()
   from /usr/kde3/lib/kde3/libkatepart.so
#15 0xb617c794 in KateViewInternal::doReturn ()
   from /usr/kde3/lib/kde3/libkatepart.so
#16 0xb6153cf3 in KateView::keyReturn ()
   from /usr/kde3/lib/kde3/libkatepart.so
#17 0xb617e344 in KateViewInternal::keyPressEvent ()
   from /usr/kde3/lib/kde3/libkatepart.so
#18 0xb617deb8 in KateViewInternal::eventFilter ()
   from /usr/kde3/lib/kde3/libkatepart.so
#19 0xb6ef42ee in QObject::activate_filters ()
   from /usr/lib/qt3.1/lib/libqt-mt.so.3
#20 0xb6ef438b in QObject::event () from /usr/lib/qt3.1/lib/libqt-mt.so.3
#21 0xb6f3969c in QWidget::event () from /usr/lib/qt3.1/lib/libqt-mt.so.3
#22 0xb6e83bd1 in QApplication::internalNotify ()
   from /usr/lib/qt3.1/lib/libqt-mt.so.3
#23 0xb6e846bf in QApplication::notify ()
   from /usr/lib/qt3.1/lib/libqt-mt.so.3
#24 0xb76c464e in KApplication::notify () from /usr/kde3/lib/libkdecore.so.4
#25 0xb6e05fda in QETWidget::translateKeyEvent ()
   from /usr/lib/qt3.1/lib/libqt-mt.so.3
#26 0xb6e0c8e1 in QApplication::x11ProcessEvent ()
   from /usr/lib/qt3.1/lib/libqt-mt.so.3
#27 0xb6e2306d in QEventLoop::processEvents ()
   from /usr/lib/qt3.1/lib/libqt-mt.so.3
#28 0xb6e9edb1 in QEventLoop::enterLoop ()
   from /usr/lib/qt3.1/lib/libqt-mt.so.3
#29 0xb6e9ecb6 in QEventLoop::exec () from /usr/lib/qt3.1/lib/libqt-mt.so.3
#30 0xb6e835af in QApplication::exec () from /usr/lib/qt3.1/lib/libqt-mt.so.3
#31 0xb75b0cf8 in kdemain () from /usr/kde3/lib/libkdeinit_kate.so
#32 0xb75b4794 in kdeinitmain () from /usr/kde3/lib/kde3/kate.so
#33 0x0804e13a in launch ()
#34 0x0804e8aa in handle_launcher_request ()
#35 0x0804ef6a in handle_requests ()
#36 0x0805009e in main ()