In your example document "Don't use HTML auto paragraph spacing" is turned on. This means before and after spacings do not overlap but are added together.

Additionally, the font you are using is Times New Roman at 12pt with double line spacing. The standard single line spacing for Times New Roman is 120% of the font height, so your line spacing is approximately 29pts. This additional spacing is added below the line, further increasing the space between your paragraphs.