How does Outlook determine if there are extra line breaks?

"Can someone elaborate on what's going on here? How does Outlook determine that there are extra line breaks?"

By default, the Auto Remove Line Breaks feature in Outlook is enabled. This causes the line breaks to be removed. Any two or more successive line breaks are not removed.

Source: Line breaks are removed in posts made in plain text format in Outlook

I've run into this myself in the past as well. The "fix" I used was to change the source email (mine were generated by a utility I wrote) and indent each line with a couple spaces, and magically Outlook would stop trying to unwrap them.

According to this blog, and this thread you may also be able to prevent the unwrap by appending a single extra space on the END of each line as well/instead. :)