I use the Text Control plugin to control e.g. white space handling and otherwise disable WordPress autoformatting and auto-paragraph/line-break work on a per-post basis. When that plugin and this one are both enabled, this one appears to override the white space settings of that one.
As an example, I have a class defined that allows me to post poetry with pre-defined white space, but of course to make that work, I have to disable WordPress' automatic handling of the text—which I do, using Text Control.
When using the original Markdown on Save plugin, there is no problem. Using this one, however, it goes back to using the standard WordPress handling if not in Markdown mode.