Small update: I found that it also breaks without UIListLayout
When using a UIScale combined with a UIListLayout, and a TextLabel with AutomaticSize = Y, the text may sometimes be cut off, not displaying all the lines:
Left is a frame with UIScale in it, and right is a frame without UIScale (using the exact same sizes, setting Object.Size = UDim2.fromOffset(AbsoluteSize.X, AbsoluteSize.Y))
The left frame has its text preemptively cut off, not displaying all three lines as it should.
There is an incredible amount of bugs with TextLabels & AutomaticSize & TextWrapped & TextFits combined with other UI tools like UIScale, it is currently horrible to work with anything TextLabel or UI.
I’ve also noticed that despite having TextWrapped on, sometimes it doesn’t bother showing the whole sentence despite the possibility of making a new line, very infuriating. And TextFits is marked as true in these cases, just like OP. Automatic Size is on and it should make another line.