Thanks for your posting! TestRail would format every step of the steps on a separate line (in the same cell). This would look as follows:
1. Step 1
2. Step 2
The newline characters you see in some steps indicate that you might have added the newlines (enter) to the steps in TestRail, can you confirm this? The export itself wouldn’t add any extra newlines in addition to the format above. We are also happy to review the Excel behavior if you could email a screenshot to our help desk at email@example.com.