Two bug fixes:

1. Reset $Test wherever needed
2. Adjust position of posts commands in the case of IF ... DO:

%zDot2Braces(routine,indent=4)
    NEW (routine,indent)
    SET S=$CHAR(127)
    SET lineNumber=0
    KILL level
    SET level=0
    SET rm=##class(%Regex.Matcher).%New("dummy")
    KILL postCommands,whileLoop
    SET sc=##class(%Atelier.v2.Utils.TextServices).GetTextAsArray(routine,0,.moduleTextArray)
    IF 'sc DO $system.OBJ.DisplayError(sc)
    KILL:moduleTextArray(1)?1"ROUTINE [Type=".E moduleTextArray(1)
    SET instr=##class(%Stream.TmpCharacter).%New()
    FOR  {
        SET lineNumber=$order(moduleTextArray(lineNumber),1,line) 
        QUIT:lineNumber=""
        QUIT:lineNumber'=+lineNumber
        DO instr.WriteLine(line)
    }
    SET colorer=##class(%SyntaxColor).%New()
    SET outstr=##class(%Stream.TmpCharacter).%New()
    SET sc=colorer.Color(instr,outstr,$select($zconvert($piece(routine,".",*),"U")="CLS":"CLS",1:"COS"),"Q=N",,,.langs,.coloringerrors)
    IF 'sc {
        WRITE "Fatal error: ",colorer.DLLResultCode,!
        Return
    }
    IF coloringerrors { 
        WRITE "Syntax error(s)",!
        Return
    }
    Set lastPostCommands=""
    FOR lineNumber=1:1 {
        SET line=$$getParsedLine(.cmdpos)
        QUIT:line=-1
        SET midCode=""
        SET lineLevel=$$lineLevel(line)
        FOR i=1:1:$length(line) quit:" "_$CHAR(9)'[$EXTRACT(line,i)
        SET lineMargin=$extract(line,1,i-1),line=$extract(line,i,*)
        Set postDone=""
        WHILE lineLevel<level {
            Set lastLineMargin=$P(level(level),S,2)
            FOR i=1:1:$P(level(level),S,1) {
                WRITE lastLineMargin,$justify("",(level-1)*indent),$select(lastLineMargin=""&(level'>1):" ",1:""),"}"
                IF $get(whileLoop(level)) {
                    WRITE " While 0"
                    KILL whileLoop(level)
                }    
                IF i=($P(level(level),S,1)-1),$LENGTH($zstrip($get(postCommands(level)),"<>W")) {
                    WRITE !,lastLineMargin,$justify("",(level)*indent),postCommands(level)
                    Set lastPostCommands=postCommands(level)
                    KILL postCommands(level)
                }
                WRITE !
            }
            SET level=level-1
            Set postDone=1
        }
        SET line=$$codeQuotedSpaces(line)
        SET posDo=$locate(line,"\b[dD][oO]? ")
        SET:'posDo posDo=$locate(line,"\b[dD][oO]? *$")
        SET:'posDo posDo=$locate(line,"\b[dD][oO]?:[^ ]+ ")
        SET:'posDo posDo=$locate(line,"\b[dD][oO]?:[^ ]+ *$")
        Set nextCmd=""
        SET braceLevel=0
        IF posDo||(cmdpos && ('$G(cmdpos("FCWB"))&&("iIeE"[$extract(line,$o(cmdpos(""))-$length(lineMargin))))) {
            Set ELSEcmd=""
            IF cmdpos>1 {
                SET cpos=9999,posEndCmd=$select($data(cmdpos("E"),payloadEnd):payloadEnd,1:$length(lineMargin_line))
                Set originalLine=line
                Set oldElse=""
                Set lastCmd=1
                FOR {
                    SET cpos=$order(cmdpos(cpos),-1)
                    QUIT:cpos=""
                    Set cmd=$extract(line,cpos-$length(lineMargin),posEndCmd-$length(lineMargin))
                    IF ('posDo||((cpos-$length(lineMargin))<posDo))&("iIfF"[$extract(cmd))&('lastCmd!'$locate(cmd,"[iI][fF]? 1")) {
                        SET $extract(line,posEndCmd-$length(lineMargin)) = $extract(line,posEndCmd-$length(lineMargin))_" { "
                        SET braceLevel=braceLevel + 1
                    }
                    IF $locate(cmd,"[eE]([lL][sS][eE])? ") {
                        IF $locate(lastPostCommands,"\b[iI][fF]? ") {
                            IF nextCmd?1(1"i",1"I").E {
                                SET $extract(line,cpos-$length(lineMargin),cpos-$length(lineMargin)+$length(cmd)+$length(nextCmd))="If '$Test , "
                            }
                            ELSE {
                                SET $extract(line,cpos-$length(lineMargin),cpos-$length(lineMargin)+$length(cmd)-1)="If '$Test { "
                                SET braceLevel=braceLevel + 1
                            }
                            Set ELSEcmd=1
                        }
                        ELSE {
                            IF nextCmd?1(1"i",1"I").E {
                                SET $extract(line,cpos-$length(lineMargin),cpos-$length(lineMargin)+$length(cmd)+$length(nextCmd))="ElseIf "
                            }
                            ELSE {
                                SET $extract(line,cpos-$length(lineMargin),cpos-$length(lineMargin)+$length(cmd)-1)="Else { "
                                SET braceLevel=braceLevel + 1
                            }
                        }
                        Set lastPostCommands = ""
                        SET:1 oldElse=1
                    }
                    Set nextCmd=""
                    FOR i=0:1 Set carCmd=$extract(line,cpos+i-$length(lineMargin)) q:carCmd'?1A  SET nextCmd=nextCmd_carCmd
                    SET posEndCmd = cpos - 1
                    SET lastCmd = 0
                }
                ; Set:postDone&'posDo&'oldElse line=originalLine,braceLevel=0
            }
            If posDo&cmdpos {
                SET posFor=$locate(line,"\b[fF]([oO][rR])? .*")
                SET:'posFor posFor=$locate(line,"\b[fF]([oO][rR])? [%A-Za-z][A-Za-z0-9]* ?=")
                FOR pat="\b[dD][oO]? ","\b[dD][oO]?:([^ ]+) ","\b[dD][oO]? *$","\b[dD][oO]?:([^ ]+) *$" {
                  SET rm.Pattern=pat
                  SET rm.Text=line
                  SET line=rm.ReplaceFirst($select($find(pat,":"):"If $1 { ",1:"")_"Do {")
                  SET:rm.Locate(1) braceLevel=braceLevel+$select($find(pat,":"):2,1:1)
                  SET whileLoop(level+1)=1
                }
                SET postCommands(level+1) = $translate($piece(line,"{",*),S," ")
                SET line=$piece(line,"{",1,*-1)_"{ "
                IF $locate(postCommands(level+1),"\b[iI][fF]? ")&'ELSEcmd {
                    WRITE $replace(lineMargin_$JUSTIFY("",level*indent)_"Set $Test=0",$char(9)," "),!
                }
            }
        }
        SET line=$translate(line,S," ")
        WRITE $replace(lineMargin_$JUSTIFY("",level*indent)_$zstrip($piece(line,".",level+1,*),"<W"),$char(9)," "),!
        WRITE:$LENGTH(midCode) $replace(lineMargin_$JUSTIFY("",(level+1)*indent)_midCode,$CHAR(9)," "),!
        SET:posDo!(braceLevel) level=level+1,level(level)=braceLevel_S_lineMargin
    }
    QUIT
    
lineLevel(line)
    NEW (line)
    SET line=$translate(line," "_$CHAR(9),"")
    FOR i=1:1 quit:$extract(line,i)'="."
    QUIT i-1
codeQuotedSpaces(line)
    NEW (line)
    SET S=$CHAR(127)
    SET quoting=""
    FOR i=1:1:$length(line) { 
        SET c=$extract(line,i) 
        IF c="""" {
            SET quoting='quoting
        }
        ElseIf c=" "&quoting {
            SET c=S
        }
        SET $extract(line,i)=c
    }
    QUIT line
getParsedLine(vetpos)
    KILL vetpos
    Set vetpos=0
    SET recLine="",cmdCount=0
    
    Do {
        SET token=$zstrip(outstr.ReadLine(),"<>W")
    } WHILE token'="<line>"&'outstr.AtEnd
    
    RETURN:outstr.AtEnd -1
    
    FOR {
        SET token=$zstrip(outstr.ReadLine(),"<>W")
        QUIT:outstr.AtEnd
        QUIT:token="</line>"
        SET rm.Pattern="<([^>]*)>(.*)<\/([^>]*)>$"
        IF rm.Match(token) {
            SET:rm.Group(1)="Command" vetpos($LENGTH(recLine)+1)="",cmdCount = cmdCount+1
            Set:rm.Group(1)="Comment" vetpos("E")=$LENGTH(recLine)
            Set:(cmdCount=1)&(rm.Group(1)="Brace")&(rm.Group(2)="{") vetpos("FCWB")=1
            SET recLine = recLine_$ZCONVERT(rm.Group(2),"I","HTML")
        }
    }
    
    SET vetpos=cmdCount
    
    RETURN recLine