This was recently changed intentionally to fix an exploit, so is expected behavior.
Any sequence of spaces and newlines is now collapsed into a single space character, and the length of kick messages is limited to 200 characters.
Update (August 2024)
The disconnect UI was improved as part of the ban API project. Newlines in kick messages have been restored, and the length limit has been bumped from 200 to 400. (Not my doing, I’m just the messenger.)