When editing text in source mode and then switching to visual, VE messes up newlines by replacing Wikitext paragraph breaks (double newline \n\n, which separates paragraphs) with double ↵ character which does not separate paragraphs. This of course breaks all formatting since paragraphs are gone and replaced with one huge paragraph peppered with ↵↵. Moreover, somehow when saving it, HTML is also displayed without paragraphs, even though source looks exactly the same.
It is a bit hard to reproduce on isolated example but happens to me a lot when I edit pages combining VE and source editing and copy stuff from external sources.
Seems a bit similar to T50290 but different since it's double newline and VE messes up correctly formatted text.