This matter is happening due to improvements regarding the block commands. When the NewLineMode is set to Br, the new lines are represented as carriage returns and does not form a block element. Die to that triggering a block commands transforms the whole content as one block element and consider it as one.
More details on this matter is available in these materials:
I would like also to inform you that due to requests fro more consistent and MS Word-like behavior the default NewLineMode value will be changed to P.
Also, to gain a behavior as per to your request I suggest changing the NewLineMode to P.
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