Answer
Use the built-in $new_line string constant available in the Report Designer function editor as the replacement value in your strReplaceAll call, rather than an HTML tag like <br/> (which isn't interpreted as an actual line break by Report Designer) — for example, replacing a known delimiter or marker with $new_line produces genuine separate lines in the rendered output. If the specific transformation still can't be achieved directly through a report-text formula this way, the fallback is to implement the logic in the report's underlying .rdf report logic instead.