I just checked this on my Nexus 7 (2012) and couldn't reproduce the issue. If you can reproduce this, can you give steps to reproduce?So I can't reproduce this in Chrome on my Nexus 5. The button does maintain the hover state, but that's just a visual thing. It correctly toggles on on off as I type (as it works on the desktop).
Can anyone else reproduce this?
(Note that I'm speaking specifically about the italics/inline formatting thing. If you run into other issues, they should be reported in separate reports.)