As per the SFDC documentations below, it should allow the new line chars (\r\n) but no luck, any idea: https://developer.salesforce.com/docs/component-library/bundle/lightning-formatted-text/example
<lightning-formatted-text value="Email \n salesforce.com and info.salesforce.com" ></lightning-formatted-text>
output: Email \n salesforce.com and info.salesforce.com