For every incoming email, LiveAgent tries to split the content of the email to 2 parts: new message and quoted part. However this is only possible if the email contains some delimiter / tag to mark where the new message ends and where the quoted part begins.
Typically in plain text emails it is either the line
----- Original message -----
or it could be the ">" characters at the beginning of line
> this is > the quoted part
In HTML emails the quoted part is usually enclosed in
<blockquote>...</blockquote>
or
<div class="quote">...</div>
If LiveAgent doesn't find any such mark in the email, it considers the whole email body as the new message from the sender.
Show quoted text
If the quoted part of message has been identified, the agent will see a button "Show quoted text" below the message in ticket. Clicking on this button actually loads the quoted text from server, so the quoted text doesn't have to be loaded at the moment of opening the ticket, which speeds up ticket opening. The button "Show more" (which is displayed if message is very large) on the other hand only uncovers the previously hidden text, which has already been loaded.
Quoting of previous messages
Quoting of previous messages in LiveAgent replies is greatly affected by the emails received by LiveAgent. It is most apparent if the reply template is configured to quote the whole history of messages in ticket.
If we have for an example ticket with some messages and the emails are correctly separated to new and quoted text, then LiveAgent can correctly add new message of each previous email (emphasized by bold font) as quoted text.
A from customer B from LiveAgent > A C from customer > B >> A D from LiveAgent > C >> B >>> A
However if mail application of the customer doesn't add valid marking of quoted part, the quoted emails start to grow like a snowball because LiveAgent can't split the received email to new and quoted parts.
A from customer B from LiveAgent > A C from customer without any marking of quoted part B A D from LiveAgent > C > B > A >> B >>> A E from customer D C B A B A F from LiveAgent > E > D > C > B > A > B > A >> D >>> C >>> B >>> A >>>> B >>>>> A
(this is just an example for demonstration of principle)