Take the basic usage example http://demos.kendoui.com/beta/web/editor/index.html if you hit enter twice on one of the <li> in the middle of the list, then you remove the carriage returns, after that there seems to be a gap between the <li> and its neighbors? See the attached pic and notice the gap between 2nd and 3rd bullets.
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Editor List display issue after removal of carriage returns
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This is a migrated thread and some comments may be shown as answers.