WordPress no longer holding post formatting

TinyMCE – at least, as-configured for WordPress – isn’t explicitly designed for copying/pasting of text richly formatted in other word processors.

That said: how are you pasting? Are you simply copy/pasting (i.e. via CTRL-C, CTRL-V; or else via right-clicking and using contextual menu commands), or are you using the “Paste From Word” button on the TinyMCE toolbar?

If you’re not using the “Paste From Word” button, please give it a try:

1) On the TinyMCE toolbar, click the “Kitchen Sink” button (last button on the right, on the top row of buttons)
2) Additional rows of buttons will appear
3) On the second row of buttons, click the “Paste From Word” button (the icon is a clipboard with a “Word” icon, “W”)

EDIT:

Are you removing the wpautop() filter? Look for something like this in functions.php:

remove_filter( 'the_content', 'wpautop' );

That would definitely cause the line-break issue you’re seeing.