Understanding automatic text formatting in the Wordpress editor

Why does the text editor remove paragraphs and line breaks?

Surely maintaining basic formatting such as paragraphs or line breaks is a basic requirement in all CMS systems. It's hard to believe that WordPress has remained the most popular content management system on the market when it's not even able to maintain basic text formatting.

I've searched numerous forums - all of which recommend the TinyMCE Advanced plugin or manipulating the wpautop() function - but nowhere is there a clear explanation of:

1. why Wordpress removes paragraphs and line breaks in the first place;

2. what is best practice for stopping the text editor from behaving this way.