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Stephen,

I'm also having the same problem in my photoshop cs6, no fix yet but a partial solve which might work, (my paragraph tab looks identical to yours too)..what I do is this. I highlight the offending text, go up to the menu at the top of the screen, go to 'type' then scroll down to 'language options' then across to kashidas, click off kashidas. then go back to the same pane and choose 'left to right character direction.' it should then alter your text to normal.

It's very frustrating as I haven't found out how to fix this as a preference, but I'm still working on it. Hope it helps you anyway.