Issue with Quiz formatting taking a life of its own

I am entering in quiz questions and have the formatting in place on Presenter side however, once the questions are in the formatting is entirely ignored. I have tried clicking to uncheck and check the Apply formatting to all existing quizzes, however its not doing what it should.

What its doing:

What it should do/look like:

Settings:

Any suggestions on having it do the same thing (what you ask it to do) all the time, not when it feels like it?