Doesn't parse <b></b> tags
Apps like Jira and Jenkins will occasionally try to send bold text. The <b> tag seems to get passed through verbatim without being interpolated into bold text.
Looks like tags are also ignored.
Yea, it was initially hacked together to make links show up properly when we had github and pivotal linking into hipchat. I haven't used it myself now in 6+ months so not sure if I will find time in the next bit to dig into this and fix, but will see. :)
Chatting with the folks in #adium-devl and was provided with https://gist.github.com/xnyhps/c96191dcdf41a8486dab -- apparently adium has a built-in html decoder now. I don't actually have a way to compile/test things, anyway (don't really have xcode set up) but it looks like that might be able to replace most of what you wrote and get full html support.