As the title suggests, when you hit [Enter], Anki currently only adds a <br> tag, not a newline. This is fine when you are editing with HTML preview, but then when you enter the HTML editor, it suddenly becomes a single, huge line.
This could be prevented by adding a real newline (ie. a LF character) in addition to <br>, so that when in HTML preview, you don’t see the difference, but when you enter the HTML editor, you don’t have to manually add them to be able to read the code.