bug#20864: How to preserve newlines in sed text replacement command?

[SF Markus Elfring]

Hello,

Are you interested to clarify escaping of new-line characters
a bit more?
http://sed.sourceforge.net/sedfaq4.html#s4.1

I would appreciate your advices for the following results
which I observe for the software version 4.2.2-7.1
on my openSUSE system.

address@hidden:~> cat test_template2.txt
*************
# placeholder
=============

address@hidden:~> XY=$(<two_lines.txt) && echo ">$XY<"
>  one
| two<
address@hidden:~> sed "s%# placeholder%${XY//$'\n'/$'\\\\n'}%g" 
test_template2.txt
*************
  one\n| two
=============

address@hidden:~> LANG=C sed "s%# placeholder%${XY//$'\n'/$'\\\\\n'}%g" 
test_template2.txt
sed: -e expression #1, char 23: unterminated `s' command
address@hidden:~> sed "s%# placeholder%${XY//$'\n'/$'\\\\\\n'}%g" 
test_template2.txt
*************
  one\
| two
=============


Which number of backslashes should be appropriate
for the desired pattern substitution in a shell variable?

Regards,
Markus