In the "Document" menu, ..
OIC, Document->XML / HTML Formatting / Content Wrap.
OK, unchecking that fixes it.
#1: So, why is there a menu Formatting -> Comment Wrap?#2: Shouldn't that be in the Formatting submenu?#3: Where does this option appear in the Option dialog?
In "Options", search for "Content Wrap".
Under XML/Text languages, several things appear, but XML isn't one of them.
Under "Android Resource XML", "Formatting" shows up - but "Content" nor "Wrap" appears here.
Under "XSD", "Formatting" - looks like the same formatting as "Android Resource" plus an extra box of controls with "auto formatting options".
#4: Why can XSD have a wrapping option, but other XML/Text languages do not?
#5: Why does Search in Options find pages with no matches? (Presumably because those control are hidden - so they shouldn't match).