2

Sometimes quotes are parts of paragraphs and shouldn't be separated from the rest of them by an empty line. But, if the quote is set in a smaller font size, with a concomitant smaller baselineskip, the latter rubs off on the preceding part of the paragraph.

\documentclass{article}

\usepackage{lipsum}
\usepackage{etoolbox}

\AtBeginEnvironment{quote}{\footnotesize}

\begin{document}
\lipsum[4]

\lipsum[1]
\begin{quote}
  \lipsum[2]
\end{quote}
\lipsum[3]
\end{document}

What should I do to avoid this? (And why does it happen?)

enter image description here

2

The etoolbox hook comes too early you want to add the size change after the "internal" paragraph started by the quote environment (which is a one item list) so the old way....

Doing it this way still allows latex to suppress the paragraph so the following text is not indented, as you want for an in-paragraph quote.

enter image description here

\documentclass{article}

\usepackage{lipsum}
\usepackage{etoolbox}

\let\oldquote\quote
\renewcommand\quote{\oldquote\footnotesize}

\begin{document}
\lipsum[4]

\lipsum[1]
\begin{quote}
  \lipsum[2]
\end{quote}
\lipsum[3]
\end{document}
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1

Your issue can also be solved by using the package quoting instead of LaTeX quote. quoting offers a flexible, configurable environment that combine quote and quotation. If your quote is a part of the paragraph, you omit the blank line between the body text and the quoting environment, and the quote is typeset without indentation, but with the same (configurable) space above and below the quote. With a blank line (or \par), the quote is typeset as a separate paragraph.

I recommend combining quoting and csquote, which will give a very flexible handling of quotes.

enter image description here

\documentclass{article}

\usepackage{lipsum}
\usepackage[font=footnotesize]{quoting}

\begin{document}

\lipsum[1]
\begin{quoting}
  \lipsum[2]
\end{quoting}
\lipsum[3]

\begin{quoting}
  \lipsum[7]
\end{quoting}

\lipsum[12]

\end{document}
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