Ok... We found a work around to make it not do so doing what I described in my first post. And we have tested this in multiple browsers. Because there is a workaround I have a hard time believing it is a browser function over a function of your control. It happens when focus is removed, so an onblur event. And we also found a PHP member variable in your CuteEditor class speaking to disabling the auto correct feature; this suggests to me that it was a feature of your control. Now in various forums we found that particular variable has been depricated, but the function seems to still live on.
So what we are looking for is where in the javascript or PHP we can look to disable this feature. It is definitely in your code base, you may need to consult a developer on the PHP version of the project for the answer. But it is most definitely not a function of the browser, browsers do not alter textual input from a paste, it only intreprets it differently for display between browsers.