I have no idea what the history of that line is, but it only affects a
node if it is the direct descendant of a form node, which is probably
why I've never run into a problem with it, even though I have tons of
math inside forms on my sites.
Looking into it closer, it appears a #text node is created inside most
container nodes (like divs), so if you have code like <form><div>test
`x^3/3`</div></form> then things render just fine. But <form>test
`x^3/3`</form> does not work.
-David