I have discovered that setting the display mode to Direct 3D 9 causes the string object to word wrap improperly, more specifically, it puts a line break in between a word and a punctuation mark that's right next to it, rather than before the word with said punctuation. It also can split contractions. For example:
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Setting the display mode back to standard fixes the problem, so I can say for sure that direct 3d 9 is the problem.