Scenario 1:

The <br/> tags after </li> are treated as separate paragraphs and inherit the list styling of the previous paragraphs resulting in duplicate bullets.

Workaround: 

var paragraphsToRemove = this.radRichTextBox.Document.EnumerateChildrenOfType<Paragraph>().Where(p => p.IsInList && p.Inlines.First() is Break);
foreach (var p in paragraphsToRemove)
{
    p.ListId = -1;
}
 
this.radRichTextBox.UpdateEditorLayout();

Scenario 2:
The <br/> tags added as the last element of <li> are treated as break elements in the content, causing additional new lines in the document.

Workaround:

var paragraphsWithLineBreak = document.EnumerateChildrenOfType<Paragraph>().Where(p => p.IsInList && p.Inlines.Last() is Break);
foreach (var p in paragraphsWithLineBreak)
{
    p.Inlines.Remove(p.Inlines.Last);
}
 
this.richtextbox.Document = document;

I have no idea how to reproduce this, but every so often after a paste operation into a RadRichTextBox, the host thread becomes unresponsive to user input. The message pump is still running but the following unhandled exception gets thrown in a tight infinite loop. The only way to close the window is to right click on the taskbar button.

System.NullReferenceException
Message: Object reference not set to an instance of an object.
Call Stack:
    at Telerik.Windows.Documents.Layout.LayoutElement.SetParent(LayoutElement newParent)
    at Telerik.Windows.Documents.Layout.LayoutBox.EnsureParent()
    at Telerik.Windows.Documents.Layout.LayoutBox.get_Parent()
    at Telerik.Windows.Documents.Layout.FormattingSymbolLayoutBox.get_IsEndOfCell()
    at Telerik.Windows.Documents.Layout.FormattingSymbolLayoutBox.GetFormattingSymbolVisual()
    at Telerik.Windows.Documents.SpanBoxPositionHandler.get_Location()
    at Telerik.Windows.Documents.UI.DocumentWebLayoutPresenter.GetViewPointFromDocumentPosition(DocumentPosition position)
    at Telerik.Windows.Controls.RichTextBoxUI.PasteOptionsPopup.CalculateLocation()
    at Telerik.Windows.Controls.RichTextBoxUI.PasteOptionsPopup.OnOwnerLayoutUpdated(Object sender, EventArgs e)
    at System.Windows.ContextLayoutManager.fireLayoutUpdateEvent()
    at System.Windows.ContextLayoutManager.UpdateLayout()
    at System.Windows.ContextLayoutManager.UpdateLayoutCallback(Object arg)
    at System.Windows.Media.MediaContext.FireInvokeOnRenderCallbacks()
    at System.Windows.Media.MediaContext.RenderMessageHandlerCore(Object resizedCompositionTarget)
    at System.Windows.Media.MediaContext.RenderMessageHandler(Object resizedCompositionTarget)
    at System.Windows.Threading.ExceptionWrapper.InternalRealCall(Delegate callback, Object args, Int32 numArgs)
    at System.Windows.Threading.ExceptionWrapper.TryCatchWhen(Object source, Delegate callback, Object args, Int32 numArgs, Delegate catchHandler)

In localizing your demo code for a RichTextBox I noticed some size mode-related inconsistencies in icon placements in the various sorts of buttons:

In Size=large, generally the icon appears above the button text. In the split button the icon is centered over and partially obscures the text. Unacceptable!

In Size=medium, generally the icon appears to the left of the text. In the Split button it appears below the text. Either is fine but should be consistent.

Also, when Size=medium and icon beside text, in all buttons I would like to see more spacing between the icon and the text; there seems to be virtually none.