The "Pretty print (XML only - with line breaks)" feature seems to always use CRLF for line breaks. This results in a line break character mix up for files using Unix line breaks (LF). The formatting feature should honor the Notepad++ EOL setting.
Open an XML file with Unix line breaks (LF).
Use button "Show All Characters" to see line breaks.
Verify the EOL setting is Unix (Edit > EOL Conversion should have Unix disabled).
Apply XML Tools "Pretty print (XML only - with line breaks)"
Verify the new line breaks uses LF (and not CRLF).