No, it is not a bug. I already raised a support ticket about this and they confirmed that this is the normal behavior. The reason is that they cannot expect the users to manually enter </br> whenever required.
The only work-around is to remove all new lines from the HTML that you want to insert in a post. This can easily be done with a script but then you have to maintain the original documents (with new lines) in a separate location because it would be very hard to edit an HTML that spans on only 1 line.
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