To improve readability, Faraday displays special formatting for the two most popular chat syntax options: quotes and asterisks. This formatting is only cosmetic, and does not change anything in the actual response.
Faraday formats text between asterisks in italics, and adds color highlights to text between quotes. This makes it easy to differentiate actions from speech when reading through your chats.
The model is generally accepting of either method as long as you remain consistent.
Using prose format tends to encourage responses that are story-like, whereas using asterisks for non-verbal actions tends to be more chat-like.