[Plugin: Shortcodes Pro] Markup being stripped out?

I am using 1.1.3 (only because 1.1.4 doesnt even install correctly) and I have a couple attributes setup and the custom code set to php. I then put the following in the code section:

echo list_blog_posts($atts);

Then i added to my themes function.php:

function list_blog_posts($atts) {

  $list_output = '<h2>Recent Blog Posts</h2>';
  $list_output +='<ul class="blog_post_list">';

  $cat_obj = get_category_by_slug($atts["categoryslug"]);
  $cat_id = $cat_obj->term_id;

  global $post;
  $args = array( 'numberposts' => $atts["postslimit"], 'category' => $cat_id );
  $myposts = get_posts( $args );
  foreach( $myposts as $post ) :  setup_postdata($post);
          $list_output += '<li><a href="'.the_permalink().'">'.the_title().' </a></li>';
  endforeach;
  $list_output += '</ul>';

  return $list_output;

}

The problem is that for some reason, its string out all markup on display. It has the url (but not linked) and the titles, but no html markup at all. This shouldnt still be happening if its a shortcode should it?

https://www.ads-software.com/extend/plugins/shortcodes-pro/