Using Beta 3 refresh. Created team project using CMMI process template. Created new scenario requirement. Typed in information in description field with carriage returns. If you press enter twice, a space is produced on the "empty" line. If you remove this one character space and click save, the white space will be removed.

Carriage returns removed when saving a work item
Roland Stens
When we press Enter, Html editor adds an empty paragraph with non-breaking space inside. The reason it does that, I believe, is that empty HTML paragraph does not have the same height as paragraph with text. It has zero height, and the only spacing we can see is inter-paragraph spacing. I think it is what you have seen.
When we editing non-HTML fields in the control (and we use Html control for editing plain-text fields), the code converts them into Html and back trying to preserve formatting. Some formatting features, which are non standard or which can't be supported in the plain text (like tables, for example), will be removed, preserving the text, but not whitespaces.
By the way, almost any editor has some character, which looks like "extra-space" at the end of line. Word has, for example.