Stick this line into a php file:
$output = '
All of the Earth's people.
';
Expected result: everything after the first quote should be orange (except for the p tags, which are blue).
Actual result: the p tags show correctly, but "s people" show up in light blue - they should be orange.
i.e. the syntax highlighting is broken by the escaped single quote, but only if the p tags are present (if they're removed, the highlighting is correct).