Visual Mode Text Editor does not render quote-block - adds escape character breaking format

When using Visual mode in the text editor, typing

{quote} 

should render the quote box for you to begin typing such as noformat, but does not. Wrapping the text in quote markdown does not work either, as the system is adding in an escape character before the secondary quote markdown. 

Video of issue: Screencast

Steps to Reproduce:

1. Create Issue
2. Within comment box, type "{quote}"
3. Observe it does not render the quote block
4. Type a message and wrap with another "{quote}"
5. Click Add, and observe broken text
6. Edit text, go to text mode, and observe escape character