This occured after a SharePoint 2010 Foundation to SharePoint 2013 Foundation upgrade.
https://www.ozkary.com/2012/06/sharepoint-custom-form-shows-html-as.html
SharePoint Custom Form Shows HTML as Text on Lookup Fields
Before: <xsl:value-of select="@FieldName" />
After: <xsl:value-of select="@FieldName" disable-output-escaping="yes"/>
BEFORE

AFTER

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