I have a vendor who occasionally sends me replies quoted this way. What's ironic is that he normally top-posts, and I suspect he's doing it this way because *I* normally quote inline in response to him.
Even better, he sometimes writes his bits in all caps ON THE SAME LINE as parts of my quoted response. What I usually do is just guess which bits are mine, and then reformat the response the way I want it. If I couldn't guess, I'd probably save the html to a file and view it in a browser. I don't think it's reasonable to expect mutt to guess / work around this type of behavior. That's way outside the scope of what mutt can do reasonably. w