Odd. I haven’t tried this theme. Do you have any other plugins installed which might interfere? If you’d like to help debug this, go into your Plugins list, and click the “Edit” link under this plugin, then select the file “empty-paragraph-for-tinymce-editor/editor_plugin.js” from the right-hand list.
The second line of that file should say
return "<p> </p>";
Try changing that to e.g. a one-pixel dot:
return "<p style="font-size:1px;">.</p>";
and see if that works…
