Assuming "Place trailing closure arguments after closing parenthesis" is checked (current default) and other content assist preferences are default as well, and given:

contribute(currentType()) {
  method name: 'foo', params: [bar: String, block: Closure]
}

fo|

Content assist at | with "Use closure literals for closure arguments" checked gives foo(bar) { it } -- replace "{ it }" with "{ }" and selection/caret goes inside literal instead of covering it. This matched end state of #625.