Does anyone know why HN doesn't handle linebreaks correctly? I mean, I can't imagine that it's by accident, but I also can't imagine why anyone would do it on purpose.

If it did like HTML and completely ignored linebreaks as extraneous whitespace, that would at least be consistent; if it expanded single linebreaks to doubles, that would be enforcing a layout preference for inter-paragraph blank lines; but "ignore one linebreak, print two linebreaks normally" is just weird.