Sheet.json "Instructions"-section - How does it work?

Or rather, what is the base syntax it uses? Would be useful if we want to make more elaborate Instructions for sheets. 

Based on some investigation I have a suspicion it uses some form of Markdown, but seems to needs '\n' or '\r' for line breaks/newline. At least some HTML stuff doesn't work, as I found a HTML hyperlink that doesn't show up at all in the Sheet's selection preview. 

You're right...it's markdown and you've got the line breaks correct.

Dammit, it say so in the GitHub Guidelines, how did I miss this? Okay, but does that mean all Markdown stuff works? Even the official sheet's don't use more Markdown than hyperlinks and unordered lists, so I can't be sure if any more stuff works.

I know it supports headings, bold, and italics. I haven't personally tried unordered lists, but it does support nested lists, as well.  The trick is to make sure that you don't delete al the necessary spaces.

I create my text in a Markdown editor so I can see what it will like and wherever I would have a carriage return I put the \n, and if I'm double spacing I use \n\n.  Then when I get it ready for the json file, I delete the each \n and stop, being sure to leave all the necessary white space for any bullets that may be nested, etc.

Can we get an offical word if all Markdown formatting works for the "instructions”-section?

I'm especially interested if images work.