This is not actually caused by stage view as you can see on the screenshot I provided. I ran with the following code:
stage ("step 1")
input message: 'INPUT', parameters: [string(defaultValue: """TESTING
TESTING2""", description: '', name: 'FAKE', trim: false)]
stage ("step 2")
And you can clearly it is rendered the same by stage view as it is by Jenkins itself which means this is either a pipeline issue or a core issue (I am not sure who generates that page and reads the script). Additionally this is listed as "Major" but does not appear to be blocking anything. I am having trouble understanding how this would be considered major. Would it be possible to elaborate on what functionality this is breaking?
I think the issue is with this line: https://github.com/jenkinsci/pipeline-input-step-plugin/blob/master/src/main/resources/org/jenkinsci/plugins/workflow/support/steps/input/InputStepExecution/index.jelly#L10
The jelly just does not accept newline characters by default and I believe stage view just steals that code