Я думаю:
SELECT
Supervisor = t.Supervisor,
Employee = REPLACE(REPLACE(REPLACE(t.Employee,'<td>',''),'</table>',''),'<br>',' || ')
FROM #Temp AS t;
Возвращает:
Supervisor Employee
--------------- -----------------------------------------------------------
Supervisor1 || Employee1 || Employee2 || Employee3
Supervisor2 || Employee1 || Employee2
Supervisor3 || Employee1 || Employee2 || Employee3 || Employee4
Вы можете обновить свои данные следующим образом.
UPDATE #Temp
SET Employee = REPLACE(REPLACE(REPLACE(Employee,'<td>',''),'</table>',''),'<br>','||');