Need help fixing (or finding info on) this line-wrap quirk in XCode

I’ve found an annoying line-wrap quirk when viewing AppleScript inside XCode (3.1.2), and I’m having trouble finding a fix or searching for more information about it online. After 12 tabs, XCode will start wrapping lines, creating very confusing and untidy whitespace that ruins readability.

Here is a screenshot of the problem. Contrast with the same code in Script Editor

Normally I would have given up by now and just removed some tabs, but of course AppleScript automatically reformats the tabs back in again.

Take a look at your settings in Preferences → Indentation; section “Line wrapping”. Maybe you have a weird setting there. Simply the fact that you might have “Wrap Lines in Editor” switched on can cause this.