"Preformatted" text behaves annoyingly not like several lines of monospace text

Blocks of "preformatted" text are very "hard" to break.

Not sure how to explain this (is there a 'markup visible' mode?). Let's try:

1) Several lines of "preformatted text" as seen in image 1. The last line is marked, because we want to change the formatting ("Create database")

2) We want to change style to "heading 3" as seen in image 2.

3) The result is that all the preformatted text is somehow affected by the style change – everything becomes "heading 3" as seen in image 3.

4) CTRL-Z that. Wanting to add a line break, move the caret to the end of "parallel" as seen in image 4. (Caret drawn in because I cannot be screen-captured)

5) Return bampfs the caret to the end of the preformatted block of text instead of adding an empty line (image 5). Rage ensues. (Caret drawn in because I cannot be screen-captured)

6) To add an empty line, one has to set the caret to line start, then press enter, resulting in an empty line being inserted before the current one (Yes, I realize there is a LF instead of a CRLF here ... but this just bad)

7) Image 6: Mark text, read to apply "heading 3"?

8) Image 7: Oops! Fuuuuuu!!!!

9) I can't even remember how I reached Image 8....