Not that it probably helps all that much, but you're script works fine for me on MS Windows, connecting to an ssh server on a local linux box.
I get:

ONE:  [/home/rob]
TWO:  [rob      pts/0        Jun 27 11:37         ]
TWO:  [rob      pts/1        Jun 27 11:37         ]
TWO:  [rob      pts/2        Jun 27 11:37         ]
TWO:  [rob      pts/3        Jun 27 11:37         ]
THREE-a: [/home/rob
]
THREE-b: [rob      pts/0        Jun 27 11:37         
]
THREE-b: [rob      pts/1        Jun 27 11:37         
]
THREE-b: [rob      pts/2        Jun 27 11:37         
]
THREE-b: [rob      pts/3        Jun 27 11:37         
]
[download]

I think the inserted newline in the "THREE" outputs arises because those replies (unlike the earlier ones) have not been chomp()ed.

Cheers,
Rob