Spoke too soon I see: the ’fix’ I linked to only fixed this for logged in users (whose comments didn’t have proper paragraphing either, on my site).

A fix for this has been posted in MCEComments’ author’s blog’s comments: set ’force_p_newlines’ to true and ’force_br_newlines’ to false in the plugin code. In v0.4.8 they’re on lines 268-269 of tinyMCEComments.php.