List formatting is not retained when AI response is used, check other formatting as well

Expected behavior

If the AI response includes a list, that list should be retained when I choose to insert the AI response or replace selected text with the AI response.

Current behavior

List formatting is not retained,. This might effect other types of formatting as well and we need to check that.

Steps to reproduce

1. On https://ketidatest.cloud68.co/dashboard
2. Start writing a book and give the book a title
3. Add a chapter in that book
4. Toggle AI on in the chapter, bring up the AI tooltip by highlighting some text
5. In the AI prompt area ask a query which will lead AI to generate a list response (for example 'Give me a list of flowers')
6. When you get a list response choose Replace selected text
7. See that proper list formatting is not retained

Environment

[Provide browser name and version and if you're working from a PC or Mac]

Possible solution

[Not required. Suggest a fix for the bug]