Hi,

Axel Svensson writes:
> Steps to reproduce:
> 1) In an empty org-mode buffer, type a * SPC a C-b C-b C-b <RET>.
> 2) The buffer now has two lines, the first one "a" and the second "* a".
>
> Expected:
> 3) The second line is formatted as a first-level heading.
>
> Actual:
> 3) The second line is formatted as normal text.

Thanks for the report, I can confirm this bug with latest org.

Here's a patch that fixes this.

Regards,

-- 
Sébastien Miquel