Figured it out. It has to do with the usage of document.write() inside of the script tags. For example, inside of handle_bbcode_safe, this works:
And so does this:
But this does not:
For some reason, using the write function here buggers it up when using AJAX. The solution is to modify some existing html instead. To do this, make a div to modify, and assign it a random id, then edit the innerHTML of it. It should look like this in the end:
That should work!

Thanks for that, Gwyrgyn! :up:

I did a quick checkup, and found the applicable notes here:

http://www.w3.org/MarkUp/2004/xhtml-faq#docwrite

since AJAX is a "standards-based presentation using XHTML and CSS" this would obviously affect it.

I'll go through the code tomorrow and do a check; then if it all works and I'm happy with it I'll update the product.

Many thanks again... I hope the above will explain it for others who may come across the same situation :)

OK, seems to work great with the quick reply, but quick edit is obviously handled differently as when a quick edit is saved, the text within the safe tags does not show on the page. However, it is there and shows again once the page is refreshed... I'll check further into it. I'll leave the first post bug report as is for now.

Unfortunately, I've not been able to spend much time on looking at fixing this mod for the quick reply functions, and I'm not sure how they'll work within the new 3.7 version so with regret, I have to remove my support for this modification.

Thanks to those of you who downloaded and provided me with feedback; perhaps at some future date I may be able to get back to it (time and inclination permitting).