Allowing newline characters in the formula editor would massively improve readability and maintainability of formulas. Consider the following formula formatted with and without newline characters.

With newlines (Underlines represent tabs, as this text box automatically removes spaces at the start of lines):
if([Test Field 1] = "One",
_if(
__[Test Field 2]="true",
__"true",
__if(
______and(
__________[Test Field 3]="true",
__________[Test Field 4]="false"
______),
______"true",
______"false"
__)
_),
_if(
__[Test Field 5]="true",
__"true",
__if(
______and(
__________[Test Field 6]="true",
__________[Test Field 7]= "false"
______),
______"true",
______"false"
__)
_)
)

Without newline characters:
if([Test Field 1] = "One", if([Test Field 2]="true", "true", if(and([Test Field 3]="true", [Test Field 4]= "false"), "true", "false")), if([Test Field 5]="true", "true", if(and([Test Field 6]="true", [Test Field 7]= "false"), "true", "false")))