Ok, contrary to popular belief, this isn't a feature we're keeping or considering.
It's a bug.
Trying to reproduce it, is another thing.
Could the ones who are having problems with the carriage returns, please go to their USER CP panel, and select EDIT OPTIONS and change their editor preferences at the bottom of the page. (from quote box, to standard, to WYSIWYG) and see if they are still having CR problems on every reply?
Thanks
Ridley...