I have checked off "Word Wrap Notes in Add & Edit."
3.28 ignores this setting.
3.27 did not have this problem.
Confirmed as a bug. In V3.28, we rewrote how the notes field was processed to allow for new features. Somehow this got broken. Will investigate.
I haven't traced the issue but there is a work-around. Right-click on the Notes field and turn on Word Wrap in the resulting menu. It is not persistent (i.e. it will reset to the current behaviour when you come out of Add/Edit). There appear to be other issues in this menu e.g. "Show Notes" is present even when the Notes are already visible.
With regard to the workaround: if one has set "Word Wrap Notes in Add & Edit", then you first have to turn off word wrap (since it will be on) and then turn it back on.
Fixed at rev. 4801. Let me know if you need a release version before the next official release?