Yes, I believe that is inaccurate behavior on the server side (your code should work, and I tried it elsewhere and it did work).
I tried to display 1 ^(2^3) the following ways:
123
code used: 1<sup><sup><sub>2</sub></sup><sup>3</sup></sup>
code used: <img src="https://latex.codecogs.com/svg.latex?\Large&space;1^{2^3}"/>