I can concur with Jon - I did a lot of checking of the 'apply source formatting' tool with the latest prerelease and it appears as though all the issues associated with inline PHP code, plus spaces and line breaks incorrectly being added to PHP code in certain instances, all seems to have been fixed.
Sit tight and wait for the next version/build of Dreamweaver ...
You can have more than one verion of Dreamweaver installed, so, in the meantime as a workaround you could use Dreamweaver CC 2015 for source formatting.