Thank you. The setting is already "yes" but that setting does not give the choice between html and plain text.
I have looked at the Git Hub, but I cannot find some of the folders in the path.
In GitHub, the path is :
components/com_kunena/site/template/system/layouts/email/subscription/default.php
The folder "site" does not exist. I did find the default.php file at
components/com_kunena/template/crypsis/layouts/email/subscription/default.php
But it perhaps is not getting used as it says it is the template for html emails and my system is for some reason sending plain text emails.
Aha! So, I did not understand that the choice of Template (Kunena menu -> Template Manager -> set the default template) affects the
emails as well as the look of the site for the users!
OK, now I set "Crypsis" as the Default template, the html emails are now coming through, and the html I added to the language override is working properly.
Thank you for all the help. I hope this discovery helps others.