I was having a lot of issues like that with HTML files when I first started using SlickEdit, but got things working nicely after lots of trial and error with the options. I don't have XML/HTML formatting disabled, but I can edit your example file without it screwing up the lines as you say it does. I'm not sure, but I think this is the change that I made which got things working properly:
In the Tools menu go to Options, XML/HTML formatting... Then for each of the "(default)", "(block)", tags etc. select "Preserve content" on the Content Wrap tab.