fortunately, there are two ways for students to get from the Grades screen to the feedback, and they display differently. To get to the nicely-formatted version:
* Either be a student or go into Student View
* Go to the Grades option, then scroll down through the table (if necessary) to find the row with the assignment in question.
* On the right hand side of the row there should be one (or more) icons. For me there are two: one with some talk bubbles next to another with a checked box. Click on the talk bubbles to reveal the (nicely-formatted) feedback, complete with line breaks.
I hope this helps!
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