After playing with it some more, it does handle pasting in larger documents (simply formatted, with paragraphs, maybe a heading and some bold text), poorly. The plain text editor within Gutenberg actually handles it better.

When i pasted in a large text document into the first content block it remove all paragraph spacing. I am left with a giant undistinguished block of text. Even if you pasted in plain text, it switches back to a giant lump in the visual editor. While i've disagreed with people that composing content outside of wordpress is the workflow that represents the most prevent way to working with content, this is not helping that case. If line breaks and paragraphs can't be discerned then content editing became even more or a mess. It limits you far too much to working one way or the other.

Its use of tabs is also all screwed up. If your in a content editor you expect a tab to address spacing and not jumping between focusable items.

Nor am i sure why the sidebar is disappearing to be overwritten by block settings (most of which are empty). That just causes more confusion.

Seems like when it comes to wrangling blocks and content creation, more focus should be given to the content creation aspect over the block wrangling. Otherwise your just shifting focus to other elements or tasks that aren't the main focus of writing content.