Yeah, it's kind of edgy. You need a block on the line as well. There's div from the includeonly on the first line (which shouldn't actually be considered here) and an ol from the reference on the second.

It's from https://github.com/wikimedia/parsoid/blob/c7a9c7e5c09002bfb9318b664443751b309a65e7/lib/wt2html/tt/ParagraphWrapper.js#L300

The !Util.isSolTransparent is too broad, it should probably be leaving out template marker end tags, but moving in opening tags.

Here's a reproducible snipit,

<div>hi ho</div>{{1x|hi}} ho