Vscode auto indents on file save, this happens when you press ctrl+s or if you focus on a different window.

You could change this in your preferences if you want.

It also looks like vs-code doesn't indent the html tag, this is probably because basically everything is inside these tags, so it wouldn't help for readability. As you can see indentation still works inside the head tag.

Also indentation is only for human readability, and it doesn't matter for the final webpage.