Yeah, this is a well known issue. It's just with the Quote button luckily, so if you want to preserve formatting stuff there's a workaround (hit View Raw to the upper right of the post you want to quote, copy all the text from that, then put it in your own [quote] tags). It ought to be fixed at some point when Mahz gets around to overhauling the coding stuff, which has other problems like how there are issues with putting hiders inside hiders.