The bug also existed in CVI 6.0.
Just a note on your example: You don't need to use a continuation character in a string in ANSI C. You can just close the quotes on one line and start a new set of quotes on the next line. ANSI C will automatically concatenate the strings.
For example:
Youe example
MessagePopup ("BUG", "Ctrl-B get confused when a line continu\
ation character is encountered!");
could be written
MessagePopup ("BUG", "Ctrl-B get confused when a line continu"
"ation character is encountered!");
Closing and reopening the quotes gives you more options on indenting, etc.