Blogger just revamped their editing interface by adding a WYSIWYG editor. I personally despise WYSIWYG editors, but that isn't important, because I simply won't use it. The plain HTML editor is still available as an option. However, something in the plain HTML editor broke during the transition.

Let me start with some background. I don't know the innards of Blogger, but it's likely that it stores the posts on their servers with full HTML formatting, regardless of the Convert line breaks option. When Blogger loads up a post to edit, if the line Convert line breaks option is set to Yes, all BR tags are converted to single line breaks and all P tags are converted into two line breaks. When Blogger saves a new or edited post, if the line breaks option is set, it wraps paragraphs that have double line breaks with P tags and converts remaining single line breaks to BR tags.

Since the revamp, Blogger started to forget a step in this process. When deciding whether or not to convert the single line breaks upon loading of the post for editing, it forgets to check if the Convert line breaks option is set, and it assumes it is. That means that you could load up a post that contains BR tags, then save it without making any changes, and when you go to view the post all of the line breaks will be gone.

I have reported this problem to Blogger Support and hopefully it will be fixed soon.