John ( @john_erickson1 ),
The ability to leave formatted submission comments has long been a request of many people here in the Community and through their CSMs. In the grand scheme of things, it is a move forward for the majority of people. I don't see them going back. I do see them adding formatted text in other places -- such as the inbox messages -- at some point.
I am on the opposite end of the spectrum from you as far as how this affected me, though. I tend to leave copious notes for what the students need to do to fix their submissions. It was very difficult for students to follow because Canvas removed all my paragraph breaks in most places students viewed it. I would have to resort to numbering steps, putting multiple asterisks to separate items, etc. This is a huge benefit to my students because now they will be able to follow what I wrote.
I do agree with you on a couple of things. I've been doing a lot of double spacing today. I've trained myself over the last 12 years of using Canvas to use a double enter to start a new paragraph. I do that in email and documents as well, so it feels natural to me. This is more consistent with the way Canvas pages works, where you just hit enter once. It's something I'll have to train myself not to do. The second thing we agree on is that the box is too large -- except when it's too small. Since I like to type long notes, I have to scroll back through the box to see what I've already written. Allowing the comment box to be resizable would help both you and me.