[BUG] List formatting sometimes renders as continuous line instead of proper bullets

Environment

• Platform (select one):
• [x] Anthropic API
• [ ] AWS Bedrock
• [ ] Google Vertex AI
• [ ] Other: <!-- specify -->
• Claude CLI version: 1.0.86 (Claude Code)
• Operating System: macOS 15.6 (24G84)
• Terminal: iTerm2

Bug Description

• Inconsistent list rendering in terminal interface
• Some lists display properly with line breaks and bullets
• Others display as one continuous wrapped line
• Include both screenshots showing the difference
• Mention it seems to affect lists with ✅ checkmarks and complex formatting

Steps to Reproduce

1. Use Claude Code for tasks requiring summary lists
2. Notice some lists render properly while others don't
3. Compare screenshot-6 (broken) vs screenshot-7 (working)

Expected Behavior

Lists to always render correctly

Actual Behavior

Sometimes they render correctly, sometimes all smooshed together, wrapping as a single line