Ah, just noticed my example didn't work correctly because ironically enough this forum converts the HTML code back to the correct text. So, in case it wasn't clear:
I understand the desire to convert to Markdown but converting special characters to these codes doesn't seem like it would be useful for the purpose at all. Surely the default behaviour here should be to paste them as-is? I realise > is used for quote blocks, but an ampersand is nothing special as far as I know - and I don't think this sort of conversion behaviour by default is useful to anyone? I'm struggling to understand the use case vs it being pasted "as-is".