I managed to replicate it, and I can confirm it is a bug in SMF.
The search is doing a string replace for words to highlight, you used the terms "working on". The highlight HTML is "<strong>xxx</strong>", but "strong" contains "on". SMF is erroneously replacing the text in it's own tag, generating the output:
<str<strong>on</strong>g>working</str<strong>on</strong>g>
One day developers might learn that "preg_replace" on HTML content is a very bad idea, there is no excuse anymore with PHP's DOMDocument class. Or even simpler, split the content into words (explode) and apply the highlight to the words individually, then join it back together (implode), rather then a mass search/replace.