Yep, I think that formatdoc is a subset of markdown. PG makes an explicit reference to the original markdown in the code.

From app.arc:

   ; http://daringfireball.net/projects/markdown/syntax
   
   (def md-from-form (str (o nolinks))
     (markdown (trim (rem #\return (esc<>& str)) 'end) 60 nolinks))
   
   (def markdown (s (o maxurl) (o nolinks))
     (let ital nil
       (tostring
         (forlen i s
           (iflet (newi spaces) (indented-code s i (if (is i 0) 2 0))
                  (do (pr  "<p><pre><code>")
                    (let cb (code-block s (- newi spaces 1))
                      (pr cb)
                      (= i (+ (- newi spaces 1) (len cb))))
                    (pr "</code></pre>"))
                  (iflet newi (parabreak s i (if (is i 0) 1 0))
                         (do (unless (is i 0) (pr "<p>"))
                             (= i (- newi 1)))
                         (and (is (s i) #\*)
                              (or ital
                                  (atend i s)
                                  (and (~whitec (s (+ i 1)))
                                       (pos #\* s (+ i 1)))))
                          (do (pr (if ital "</i>" "<i>"))
                              (= ital (no ital)))
                         (and (no nolinks)
                              (or (litmatch "http://" s i)
                                  (litmatch "https://" s i)))
                          (withs (n   (urlend s i)
                                  url (cut s i n))
                            (tag (a href url rel 'nofollow)
                              (pr (if (no maxurl) url (ellipsize url maxurl))))
                            (= i (- n 1)))
                          (writec (s i))))))))