The order matters!

Should be

    statement += (block | line | empty) > list

instead of

    statement += (empty | line | block) > list

The whole example below.

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from lepl import *

word = Token(Word(Lower()))

statement = Delayed()

line = Line(word[:])
empty = Line(Empty(), indent=False)
block = line & Block(statement[1:])

statement += (block | line | empty) > list
program = statement[:]

program.config.lines(block_policy=constant_indent(4))
parse = program.parse

print(parse('''
abc def
ghijk
    mno pqr
        stu
    vwx yz
'''))

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Best regards,