Thinking about this a bit more: this is really a Quarto bug, and should be fixed there. If we add a workaround like this, it will probably cause trouble when Quarto deals with the issue (which doesn't only affect kableExtra).

this is really a Quarto bug

This can be discussed more in the Quarto issue, but this is not considered a bug on Quarto side.

Quarto won't parsed Markdown syntax inside a HTML table. So if kableExtra emits some HTML code containing markdown syntax, this markdown syntax won't be processed by Quarto not Pandoc. This includes Maths, Citations, or any markdown syntax.

Same with LaTeX table - Markdown is not parsed inside a LaTeX code. And this one is true for bare pandoc always.

Quarto provides a feature to allow some such content to be marke inside HTML table or LaTeX table, so that they are catched, processed by Quarto and Pandoc and inserted back in place. My suggestion is for kableExtra to leverage this feature in Quarto context.

Tools like gt provides some features to deal with this in general,not only in Quarto context.
I know they do offer special formatting function for markdown cells (processed by commonmark to transform to HTML before emitting output as HTML), or HTML cells to mark them as raw html to avoid escaping.
They do have now support for math by rendering them to HTML in R using katex R package so that HTML is produced (and not markdown).
And I think they do support citations in cells also by allowing to mark them as to be processed by Quarto, leveraging the attributes feature for HTML or LaTeX I mentioned in the issue.

I'll plan to document this more so that package author can make their choice regaring all this.

Hope it helps understand.