Yeah italic bbcode block is not implemented as a multiline. This is current intended behavior. Same goes for bold. The reason I did this is that <i> and <b> also are treated as inline vs block level tags in html.
I am open to expanding this use case if there are enough requests for it, but as it stands it is behaving as designed.
Writing multiple paragraphs of italic / bold text without putting in the effort to put the formatting tag on every paragraph is one of the kinds of low effort-to-annoyance-ratio forum posts that I don’t think should be encouraged.