Copy pasting from simple text editor does not create paragraphs

If I write text in notepad, leaving blank lines between paragraphs, copy-paste it in the editor, select a line and make it a title I get the entire content as a title. I would expect only the selected line to become a title. The underlying issue is that the whole content is pasted in one single paragraph in the WYSIWYG.

This issue is hard to fix as it requires that the content from the clipboard gets intercepted and modified in javascript before getting pasted in the WYSIWYG textarea. A workaround starting from XE 1.9 is to use the Source tab of the rich text editor to paste such content.