update #3 2015-10-01
Another user reports that the issues continues for him, even with the server version updated (as discussed in update #2). Many other users have reported that the problem has gone away with no changes by ExQuilla, Thunderbird, or them. Something is causing problems with Office 365, we don't really know what it is, but those problems seem to be slowly being fixed by Microsoft. I wish there was some way to be more definitive, but I am not aware of any way to get better information our of Microsoft.
Update #2 2015-09-28
Another user has now reported that a problem which used to exist has now disappeared due to a server update on Office365. If you are experiencing this issue, it will probably go away on its own when Microsoft updates the server.
You can check the server version in use by activating "Log Server Interactions" from Tools/Account Settings/(your ExQuilla account)/"Log Server Interactions". Enable that, do some operation (like click on a folder to check email), open the log, then disable that option (as it will generate a log of activity if left activated.)
Search that log for a line that contains ServerVersionInfo and check your version:
Affected version: ServerVersionInfo MajorVersion="15" MinorVersion="1" MajorBuildNumber="274" MinorBuildNumber="22" Version="V2_66"
Updated, unaffected version: ServerVersionInfo MajorVersion="15" MinorVersion="1" MajorBuildNumber="280" MinorBuildNumber="20" Version="V2_66"
Update #1 2015-09-28:
One user has sent detailed logs, and according to the logs, ExQuilla is sending a properly formatted email to the server, but when read back in Sent Items (and presumably when sent) the line breaks and spaces were stripped. I suspect this is an issue with a particular release of Office365, but still investigating. The only workaround I can imagine for this issue, which appears to be a bug in Office365, is going to be to force emails sent with that version of Office365 to always use HTML emails. That would require an updated version of ExQuilla to enforce. So this issue is not resolved, and we are still investigating options.
Beginning about September 17, 2015, we started receiving reports from ExQuilla users who used Office365 as a server, that sent emails have all line breaks removed, which appears as an issue to both the recipient as well as in the Sent Items folder. A typical report:
"When I send or reply to emails, all the line breaks in the messages are lost. The entire email message becomes one big paragraph (sending text emails, not HTML emails)."
We've investigated whether this is an issue related to changes in either Thunderbird or ExQuilla, and it does not appear to be. Something changed in Office365. One user reports:
"FYI: Seems that this is a known issue, and is possibly due to Office365.com. There are complaints in the Office 365 community forums. My apologies for thinking this was an ExQuilla issue."
A user reports a workaround:
"I can get around this it seems by using explicit html formatting. e.g. add a bullet list or change the font, etc. This results in changing the message Content-Type to multipart/alternative with text/plain and text/html sections, *both* of which are formatted as expected. If I just type a message without changing any formatting, it gets changed to type text/plain and removes all the carriage returns, putting all text on one line."
So the current suggested workaround, should you have this issue, is to manually select a font for your outgoing message.
If this issue persists, we will be forced to automate that workaround for ExQuilla users. But the current hope is that this is a bug recognized by Office365 that will be fixed soon by them.