Rich Text widget: Line breaks not shown in editor

I am using the Rich Text widget ( and facing an issue with line breaks while editing the text. When an item containing some text with line breaks is displayed on the ReadOnly page with Editable = Never, the line breaks are shown properly. On the other hand while editing on the NewEdit page, the editor does not show the line breaks, but it does create the <br> tags in the background (see attached screenshots). Am I missing some configuration?  
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