afaics It doesn’t work in Obsidian either! LP or legacy.
Select two lines. Bold them. Add empty line between existing lines thereby turning them into paragraphs. Bolding will disappear from second paragraph.
Bold two paragraphs and only the first bolds.
This function works perfectly well in Marktext and Typora, and my more traditional markdown editor, WriteMonkey; they all add the ** to start and end of each line. I think it is a bug.