Need Help with Simple Text Reformatting Problem

[Barrowman]

Where you have:

        if "<LINE>" in line:
            line = line.split("<LINE>")
            line = "".join(str(x) for x in line)
            _line = re.sub(r"</LINE>", " ", line)
            f.write(_line)

You have not taken out the end of line characters.
I have not created all the little files you have but try this:

        if "<LINE>" in line:
            line = line.split("<LINE>")
            line = "".join(str(x) for x in line)
            _line = re.sub(r"</LINE>", " ", line)
            outline = _line.rstrip('\r\n')
            _line = outline
            f.write(_line)

I just created the one file with all of your text in it so it might need some adjustment.