Not recognizing paragraph / line breaks

I have been messing with this theme for 4 days now trying to figure out why it will not publish the paragraphs as they are typed.

I have checked the source code and the <p> html is displaying in the editor

I have checked, Administration » Configuration » Content authoring » Text formats » Full HTML to ensure that the Convert line breaks into HTML (i.e. <br> and <p>)  is checked.

I have tried installing WYSIWYG linebreaks

I have checked and tested every single configuration there is to be had and configured and nothing is fixing the issue.

What i want is

Paragraph 1

Paragraph 2

Paragraph3

What i get is

Paragraph 1. Paragraph 2. Paragraph 3.

This is clearly a coding issue not a settings issue as i even attempted to hire someone to fix it and they said its not in the settings and i would have to pay them to fix the code so please save me the " send us your site login info" speech and tell me what needs to be fixed in the CSS so i can move forward with my site. You have the same problem on your demo site as well so if you need "login info" just test it on your own site and see for yourselves.

Thanks