The next PHP code shows an empty line in the browser. This is because Windows stores a "Return" as a \r\l (0000013#10) and xdebug seems to replace only the \l

<?php
$my_test_string = 'hello
world';

var_dump($my_test_string);
?>

Hexdump -C output:
00000000 3c 3f 70 68 70 0d 0a 0d 0a 24 6d 79 5f 74 65 73 |<?php....$my_tes|
00000010 74 5f 73 74 72 69 6e 67 20 3d 20 27 68 65 6c 6c |t_string = 'hell|
00000020 6f 0d 0a 09 09 09 09 09 77 6f 72 6c 64 27 3b 0d |o.......world';.|
00000030 0a 09 09 09 09 09 0d 0a 76 61 72 5f 64 75 6d 70 |........var_dump|
00000040 28 24 6d 79 5f 74 65 73 74 5f 73 74 72 69 6e 67 |($my_test_string|
00000050 29 3b 0d 0a 0d 0a 3f 3e |);....?>|
00000058

Html output (note that the "&0000010" is on a new line):
<pre class='xdebug-var-dump' dir='ltr'><small>string</small> <font color='#cc0000'>'hello
world'</font> (length=17)