Text on adjacent lines is not the same as being space separated. A multi-line regex works by spanning lines, so in your case you'd need to search for the expression (or something similar):
This is the intended functionality.
Normal Regex vs Multi-line Regex
The underlying regex engine that performs the match comparison is exactly the same for both expression types, the difference is that the normal regex engine matches lines on a line-by-line basis. That is, a line is pulled from the source, tested against the regular expression, and kept if a match is found. Each line is searched like that, so the match is independent of any other line.
Multi-line regex works by reading the whole file (or at least a large chunk of lines if the file is very large) and then matching the expression over the whole text. This is most often useful when a search expression might be split over several lines.
Since a multi-line expression is searched over a much larger chunk of text it will normally be slower than the normal regex. Therefore if the search term (e.g. email address pattern) is not expected to span line boundaries it is recommended that you use the normal regular expression option.