You can't copy the complete contents of a cell into a non-table. The complete contents of a cell includes the invisible end-of-cell marker as well as an invisible paragraph mark.
To fix this, try modifying this chunk
Code:
' Copy the first row of the source table
Set sourceText = sourceRow.Cells(2).Range 'Note I removed the formattedtext from here
sourceText.End = sourceText.End - 1 'or 2 if you don't want the paragraph mark either
' Add the new paragraph
targetText.Collapse Direction:=wdCollapseEnd
targetText.FormattedText = sourceText.FormattedText