zsh as ksh for login shell -- a bug with PS1?

["William H. Magill" <magill@mcgillsociety.org>]

This is under FreeBSD 5.3 on an Alpha XP1000;
Zsh version zsh 4.2.1 (alpha-portbld-freebsd6.0)

/usr/local/bin/zsh is sym-linked to /usr/local/bin/ksh
both are in /etc/shells.

I have a two-line prompt string

PS1='[$PWD] $me
  $HOST> '

I have been using this for many years. It works fine under ksh on Tru64 
Unix 5.1 and when zsh 4.2.1 itself is evoked as the login shell.

However, if I change the /etc/password entry to evoke ksh instead of 
zsh, the newline is lost, resulting in a prompt consisting of "$HOST> "

Use of single or double quotes makes no difference.
I've tried it with and without "set -o PROMPT_SUBST" and note no change.
I've tried it using \n instead of a "real" newline without effect. (\n 
winds up in the prompt string.)

Set displays PS1 as the string containing the newline. It is only the 
actual prompt itself which does not contain the newline, only the 
second line of output.

There is clearly a difference in between the performance of zsh and zsh 
as ksh.

Is this a bug with zsh?

T.T.F.N.
William H. Magill
# Beige G3 [Rev A motherboard - 300 MHz 768 Meg] OS X 10.2.8
# Flat-panel iMac (2.1) [800MHz - Super Drive - 768 Meg] OS X 10.3.7
# PWS433a [Alpha 21164 Rev 7.2 (EV56)- 64 Meg] Tru64 5.1a
# XP1000  [Alpha 21264-3 (EV6) - 256 meg] FreeBSD 5.3
# XP1000  [Alpha 21264-A (EV 6.7) - 384 meg] FreeBSD 5.3
magill@mcgillsociety.org
magill@acm.org
magill@mac.com
whmagill@gmail.com