@alexforster @luna the formatting is actually in HTML, if there is a front end that has a Markdown option, it is converted to HTML. The servers are passing this HTML around with the federation but there are only some tags allowed and others will be stripped when the local server instance doesn’t support some particular tag, but even the stock Mastodon web shows much more than it allows to write itself.
And also for app support, generally browser-based clients will have an easier time showing HTML text than some native clients that only show plain text.