It doesn't escape HTML characters, it simply passes along the entered text, rewrapped, with extra <blockquote> tags around it. When I mentioned this in the Chatterbox, you appeared to not give a damn.

Update: Appearances can be desceptive, perhaps the author's tiredness could have played a role too &mdash after all, it was the middle of the night for him at the time; but from later conversations it appears to mainly have been a misunderstanding between us. Glad that has been cleared up.