Here's my code which the BreakElement does not appear to change the line break code used by the editor.

I also tried   editor.BreakElement = "Br"

            Dim editor
            Set editor = New CuteEditor
            editor.ID = "BodyofText"
            editor.Text = BodyofTextValue
            editor.ConfigurationPath = "CuteEditor_Files/Configuration/b2i.config"
            editor.EditorBodyStyle = "font:normal 12px arial;"
            editor.EditorWysiwygModeCss = "asp.css"
            editor.EnableStripScriptTags = false
            editor.BreakElement = "P"
            editor.Draw()

Here is the editor's HTML output 

<div></div>
<div>&nbsp;</div>
<div>&nbsp;</div>
<div>&nbsp;</div>