First case: in this case, the code-tag-enclosed items are purely inline; no preceeding newlines:

This is a test of a short  code segment where the code tag occurs in line -- that is, without a preceeding newline -- and this  is a far more verbose example of nothing in particular except that it is much longer; in fact, so long that it this second clause exceeds the width of the text entry box into which this is being typed. This part of the para follows a space after the closing code tag.

Note that the neither placeholder above displays a download link, and the second is rendered without a + continuation symbol.

Second Case -- in which the code tag stands after closing the paragraph tag and at the beginning of the second new line following the close_para_tag:

Simulated Error:  use of <c> tags beginning on new lines, (but still inside para tags) to enclose content which is mostly non-sense except for its value as a long, verbose example of code-tag enclosed text which could have begun on its own line.

We still have no line break because (??) none exists inside the code tags. Note that despite the tags, we may not be rendering as desired.

In our third case, we post the with the same markup & essentially the same text as immediately above...except that there is a newline after ' example of' in the text inside <c> </c> tag pair:

Simulated Error:  use of <c> tags beginning on new lines, (but stil
+l inside 
para tags) to enclose content which is mostly non-sense except for its
+ value as a long, verbose example of code-tag enclosed text which cou
+ld have begun 
on its own line.
[download]

Note that despite the length, we may not be rendering as desired (i.e., no download link), for reasons obscure to my caffeine-deprived brain Duh, because the download link appears (exists) only AFTER the post is actually created.