Not respecting paragraph formatting

Re: Display Posts Shortcode V2.3

I added Bill’s filter to display full post:
add_filter( 'display_posts_shortcode_output', 'be_display_posts_full_content', 10, 7 );

It displays the posts, but does not render simple formatting, like new paragraphs.

http://wordpress.org/extend/plugins/display-posts-shortcode/