Attempting to add new nested elements within nested elements with no children is failing

[mitermayer]

Attempting to add new nested elements within nested elements with no children is failing
example:

Pressing BLOCKQUOTE on the list

<bloquote>
<ul>
   <li>
      foo<CURSOR_IS_HERE />
   </li>
</u>
</bloquote>

Expected bahaviour:

<bloquote>
<ul>
   <li>
        <bloquote>
            foo<CURSOR_IS_HERE />
        </bloquote>     
   </li>
</u>
</bloquote>

Whats happening:
Nothing