The issue is not only with the content of the code button in the editor but also with the HTML button. I noticed this when I entered HTML code using the HTML button while editing the terms and conditions of my site.

The tags from </> button before edit:

<ul>
 <li>....li>
ul>

The tags after click on edit:

 
....
 
 

are not displayed correctly in the browser, and more specifically, their content disappears. I have to manually reformat the text in the editor to display these lists properly. Additionally, the resulting HTML code after filtering is a single line, so HTML code that was formatted with spaces and line breaks in VS Code may lose its formatting after the filters are applied.