When the NewLineBr property is set to true, it only handle the Enter
key command and inserts <br> tags when a new line is inserted -
this property has nothing to do with the paste from Word feature.
The Paste From Word option just strips the MS Word formatting, MS Word special tags and attributes, but it does not strip the paragraph <P> and any other standard HTML tags. The strip functionality is based on regular expression in the editor's source code and they cannot be modified.
the Telerik team