YAML treats indented objects below an unindented object as children of that entry (http://yaml.org/spec/1.2/spec.html#id2777534). This can cause the parser to throw out entries that are indented after an unindented line, and that line itself. This can cause ES to come up with default settings incorrectly.
Users should remove all indenting on all lines in elasticsearch.yml. With those out, the config should parse correctly.