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I think what the OP might be seeing is the different behaviors between an insert point and a range.
If you just click somewhere in the code window it creates an insert point. When you try to insert a clip with a \n then it inserts a literal '\n'.
If you highlight a range in code view it will insert the actual line breaks.
Not sure if that is a 'bug', but I've lived with it for years and thought it was intended behavior.
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