Single soft line breaks in .ipynb markdown cells render as hard breaks in VS Code when using quarto extension

[devmcp]

Bug description

When the Quarto extension is enabled in VS Code, single newlines (soft breaks) within a
paragraph in a Jupyter notebook (.ipynb) markdown cell are rendered as hard
line breaks in the cell's rendered output. In standard CommonMark, a single
newline inside a paragraph should collapse to a space; only a blank line should
start a new paragraph.

This means hard-wrapped prose in a markdown cell renders with the wraps
preserved as <br>-style breaks instead of flowing as one paragraph.

The behavior is specific to Quarto: disabling the Quarto extension restores the
expected CommonMark behavior in notebook cells. The VS Code Markdown preview
(.md files) renders correctly the whole time, and I have
"markdown.preview.breaks": false set in my settings — that setting does not
appear to be honored by Quarto's notebook cell renderer.

Steps to reproduce

1. Enable the Quarto extension.
2. Open a .ipynb file in VS Code.
3. In a markdown cell, enter text that is hard-wrapped across lines, e.g.:

Hello
world

5. Render the cell.

Actual behavior

The soft break is preserved as a hard line break, so the output wraps after
"FSL-route" exactly where the source was wrapped.

i.e. it renders as

Hello
world

Expected behavior

The cell renders as a single flowing line (the soft break collapses to a space):

I.e.

Hello world

Your environment

• Quarto extension version: 1.9.38
• VS Code version: 1.125.0
• OS: macOS 26.5.1
• Relevant setting: "markdown.preview.breaks": false