its not a bug, its how the html tag 'blockquote' operates. since the quotes are, in fact, just blockquoted text with horizontal rules, they have to follow the same 'guidelines' that blockquote does.
its available to you can nest quotes inside quotes. for instance, if you wanted to say:
Quote:
i like peas. someone once said and i would tend to agree
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etc. forgive the stupid example, but im not really feeling creative