HTML formatting not working in emails

Hi Stackideas!

EasyDiscuss won't send formatted HTML emails to Discussion subscribers.
No matter what changes we make to settings, EasyDiscuss notifications (for both Category posts AND replies) don't show the HTML formatted emails.
Some settings info:

Using v latest EasyDiscuss and Joomla and all addons.
HTML email formatting is YES.
Switched from bbcode to JCE in both posts and replies (no effect).
Theme is Simplistic.
Category "eNewsletters" used for testing subscriptions— got email but no HTML in it.
ACL is fine we think.
Cron seems to be working fine.

To be clear: the email shows "run-on" plain text. (see attached image; shows we successfully added the "reply text break" ~~~~~ ,so this seems to be the correct email template files set)

(Site log-in info provided below)

(Since I'm waiting for one of your semi-regular discounts to re-up my EB license I can't ask a similar question in EB forums—EB sends formatted, but does not send new Post email!)