On the Markdown syntax guide, we mention the below:

README files
If your repository contains a README.md file at the root level, Bitbucket Server displays its contents on the repository's Source page if the file has the .md extension. The file can containMarkdown and a restricted set of HTML tags.

However, we currently apply MarkDown formatting to the following file extensions:

.md
.mkd
.mkdn
.mdown
.markdown 
.text 
.txt

For plaintext files, the expectation is that there is no formatting / parsing done, and that the file is rendered as-is in a fixed-width font.

Additionally the documentation should be amended to reflect the additional file extensions that can be used to ensure a file is parsed through the MarkDown formatter.