The implementations are correct.
The key here is the word "literal". None of the internal entities
contains that sequence (ie carriage-return followed by linefeed)
*literally* - ie in the very text between the quotes in the entity
definition. (There should be a link from the text in section 3.3.3 to
the definition of literal entity value in 4.5.) The DA entity contains
that sequence in its replacement text, but not in its literal value.
A "natural" (to me, anyway) implementation will not have to do
anything at all to comply with the phrase quoted above, because it
will already have reduced literal #xD#xA sequences to #xA before
parsing.
-- Richard