Block Bindings: Formats not supported in content

[talldan]

Description

Formats (bold, italic, link) don't seem to be supported in content (the inner html of an element) using the block bindings API.

Step-by-step reproduction instructions

Prerequisite: Enable the pattern overrides experiment from the gutenberg experiment page.

• Create a new post
• Insert a mixture of blocks that include paragraphs and optionally other blocks too
• Select the blocks, and 'Create a pattern' from the block options menu
• Give the pattern a name and make it 'synced'
• Click the 'Edit original' button on the toolbar
• Select a paragraph block in the pattern, and in the block settings sidebar expand the advanced section. Check the 'Allow instance overrides' option
• Use the 'Back' button in the header area of the editor to go back to the post
• Edit the paragraph and add formats
• View the post on the frontend

Expected: The frontend should show the added formats as normal
Actual: The html of the formats is shown

Screenshots, screen recording, code snippet

Environment info

No response

Please confirm that you have searched existing issues in the repo.

Yes

Please confirm that you have tested with all plugins deactivated except Gutenberg.

Yes