The description of collections does support similar wiki formatting as annotation fields.

Most of the formatting rules listed on https://musicbrainz.org/doc/Annotation work. E.g. entering the following into a collection description renders as expected:

= Title 1 =
== Title 2 ==
=== Title 3 ===
    * [https://example.com|one]
    * two
----
''italics''; '''bold'''

But using bold italic or code formatting doesn't work. When entering this the output shown is literal HTML.

For example this entered code:

'''''bold italic'''''

Gives visually this output:

<p><bdi><strong><em>bold italic</strong></em><br /></bdi></p>

See this screenshot: