Hello, It seems like this fix regressed as a result of commit 5d186b499dde97f59a91dc11f4c4a15113d29f4d. After I updated to the latest version of org-mode again, I noticed that the fontification of newlines was back. When I created a branch that reverted 5d186b499dde97f59a91dc11f4c4a15113d29f4d, the fontification behaving as it should.
Thanks, Rohit Patnaik