I agree it’s about the different user bases and their expectations.
In general coders, and other who typically use text files, are used to Enter creating a new line. While writers, most academics and the general public expect Enter to create a new paragraph. Muscle memory is important which is why there ought to be a toggle.
If you thought the default in Live Preview ought to be Enter=New Para and the default in legacy ought to be Enter=New Line, I probably wouldn’t disagree. Though there ought to be an alternative shortcut for the alternative behaviour. At the moment, the only way of achieving a new paragraph is Entering twice.
But I think it’s probably more consistent for Obsidian to have one default, whichever editor is being used. It has been an issue for some all the time, which probably explains the frequency of requests for CSS to give lines the appearance of paragraphs. Writers need paragraphs, and they need to be able to see them; they also need to paragraphs to convert into other formats including the paragraphs as paragraphs. And that’s true, wysiwyg or no wysiwyg.