Seems like it might be an issue with that report. Perhaps it can be customized to change that. If you always use the same ship to and bill to, you coudl modify the report and put a static text block in there instead of reading from the field. Then you could format it how you like. That is the best thing I can think of as a work around if the carriage returns from the product are not being respected. It could also be the formatting of the field on the report. The report might be converting it to plain text and stripping out the carriage returns. That could be changed also if thats the case. Both methods would require modifying the report. There is actually a video on modifying the Purchase Order report in the free video training series that you could use to learn how to modify the report. If you run into any issues or cannot get it to work, you may want to contact support for some help.
The free video training is here - https://docs.bmc.com/docs/trackit2020/training-videos-912125636.html
I finally had some time to try this myself. I copied the Print Preview report for Purchasing, modified the report and added a new object to the report. The object I added was a Rich Text object, which is located in the list of fields/objects on the left side of the report designer. I have circled it in the screen shot below. Just click and drag that field onto your purchase order report and then expand it to the size you want.
Once you have this object on the report, look at its properties on the right side and look for the parameter called HTML Data Binding. In this drop down, expand it out and find the Ship To Address and select it. Then scroll down to the bottom of the attributes and look for a section called Data Bindings and make sure the HTML one has the same Ship To Address field selected. Now when you save and preview/print the report, the line breaks should be respected. I will go ahead and report this to R&D as it appears to just be a small defect. I have included screen shots of the binding settings below as well. Repeat this for the Bill To Address field.