The Markdown to HTML converter used by the Documentation Templating tool is Markdig.
Out of the box all standard markdown features are supported. For example you can use links, emphasis, superscript, underline and strike through in markdown and it works perfectly. You can also use HTML code within your markdown files.
But, the best thing about Markdig is that there are many community extensions available for it, so by only changing a couple of lines in the source code of Documentation Templater you could add:
- LaTeX support
- Citations
- Soft and Hard Lines
- Figures and Diagrams
- Footnotes
- Media support, e.g. YouTube (all though you could use iframe tags anyway)
- And much more (see the Markdig GitHub page)