I have no idea of the cause, but will describe what I see.
Pidgin 2.7.2 with pidgin-encryption 3.1
If I send an ordinary line ("testtesttesttest..." of say 160 characters, that works fine.
If I send the same line with "http://" in front of it (so that it gets autoconverted to a lnk), it works fine with pidgin-encryption turned off.
If I send the line above (with "http://" at the beginning) with pidgin encryption turned on, then the actual link is correct (the URL), but the text describing the link is broken into two pieces (at some point that varies with the URL). The first line (the link) is colored blue (designating a link) and contains the first 90-120 characters of the text describing the link (which is supposed to be identical to the link). The second line contains the remainder of the text as plain text.