Bold and italics buttons do not toggle until you move focus back to textarea.

[pockhiss]

IMO: Seems like a confusing usability issue.

Open the Demo.
Put cursor after "hello" in the textarea.
Click Bold. (note: bold is now depressed)
Start typing some chars (note: chars are Bold)
Click Bold on the toolbar (issue: it does not toggle off).
If you click back to the textarea, now Bold toggles off.

Seems the Bold and Italics buttons are getting their state indicated by the cursor location in the textarea.