When the surname has an apostrophe do not place any spaces between the letters and the apostrophe. An example is D'Angelo (not D' Angelo, nor D 'Angelo, nor D ' Angelo). I am currently indexing Italian records where apostrophes are very common and the project instructions specifically instruct to not add any spacing in last names that contain an apostrophe. This allows for people searching by last name to find the surname.
Punctuation doesn't really matter in indexing, so you can do O'Neal ONeal, O' Neal, O 'Neal or O Neal. I personally do ONeal.
This also goes for given names. If some one is named William F., you could leave the period off the letter F.
You should always include the punctuation and diacritics unless the field help says something different. Field Helps are accessed by clicking on the purple question mark that appears when you click on a field. The Given and Surname fields always say: Type the name as it was written.
The current Help Center article on punctuation in names:
How do I review names that have been abbreviated or that include punctuation?
Correct an abbreviation if the complete entry is clearly visible. Do not spell out an abbreviation that is not spelled out on the record.
Include punctuation that is used in the person’s name. If you are making a correction, try to type exactly what you see on the page.
But yet I've reviewed batches across several projects that would need punctuation (like the recent military projects), and it's not there, but when I add it/remove it from the field, it doesn't give me a red flag.
The indexes we are making for Italian records are published 2 places - at familysearch.org and also the Italian Archives site. The instructions for how to index surnames with an apostrophe are a good example of different projects having different instructions and the fact that FamilySearch contracts with record owners who decide how they want their records indexed.
Correcting punctuation and spacing are not counted as errors. That is why when you correct them there is no red flag. But, we still need to follow the instructions and correct them based on the field helps and instructions.