I’m having the same problem with “Automatically add paragraphs”. A single line break results in:
<p>
Text 1
<br />
<br />
Text 2
</p>
Two line breaks results in:
<p>
Text1
</p>
<br />
<p>
Text 2
</p>
Either way there’s an unwanted <br> whose height is quite difficult to control via css.