For the record, text wrapping in the context Help window has been confirmed by NI support to work as "expected" which means in the following way:
1) if you have a single paragraph with NO carriage return, the text will wrap:
2) If you have a single (isolated) carriage return ANYWHERE in the text (as after the first sentence in the original post), wrapping is suppressed (that's the "expected" behavior according to NI R&D).
For instance, if I press return after the first sentence in the Description above, wrapping is suppressed:
3) You have to introduce carriage returns IN PAIRS, in order to get a new line AND preserve wrapping:
Of course then you get an empty line that you may not necessarily wanted...