It didn't mess up the instruction "make every fifth line bold". The blank spaces between each "paragraph" are empty lines, so it counted them too. I think this is perfectly reasonable behavior, it's what I would have done absent further instructions too.

You can see it in the generated code on the bottom right during that part of the demo. It loops over the lines and bolds them when index % 5 == 0.

Edit: I guess with the 1-based indexing of natural languages, the code actually bolds lines number 1, 6, etc. So arguably it should have done index % 5 == 4 instead, to bold lines number 5, 10, etc. But funnily enough, if it had done that, it would have bolded all the empty lines, so it would have seemed like it didn't do anything.