Add linebreaks to a caption in wikitext doesn't generate <p> tags, so adding <p> tags shouldn't generate linebreaks.
Currently
...<figcaption><p>FOO</p></figcaption>... -> [[File:Foo.jpg|\nFOO\n]] ->
whereas
[[File:Foo.jpg|\nFOO\n]] -> ...<figcaption>\nFOO\n</figcaption>...
Should be
...<figcaption><p>FOO</p></figcaption>... -> [[File:Foo.jpg|FOO]] ->
The HTML above is generated if the user adds content to an empty caption in VE.