What's happening is that all your dialogue lines are placed on top of each other and the subtitler moves them until no more collisions occur. However, an empty line cannot collide because it is removed by the wrapping system, so your line breaks are essentially ignored.
The way you're supposed to a multi-line layout like this is to do all of the text in one dialogue line, separated by line breaks, so that the subtitler lays the whole text out at once. This also allows you to get proper centering of the entire block. That not being possible, inserting any non-whitespace character after the line break, including a non-breakable space (Alt+0160) would work.