This image highlights the issue. Below the break, there is a level 1 bullet followed by 3 level 2 bullets. They fold in the editor, and display as proper bullets in preview.
Above the line break shows the problem. It is same text, but with the level 1 line just plain text, without a bullet. This still folds in the editor, but the 3 level 2 bullets fail to render as bullets in the preview (that failure is also visible in the editor given they hyphens don’t look like bullet hypens).
Another example is for quote formatting. Below the line formating is functional, but I can’t fold the quote into the top line text. Above the break I’ve indented the quote, so it folds but also fails to render in preview.