This post on indesignsecrets might explain things better. taken from:
"You may notice that if you have a lengthy caption, and you use the Live Caption feature, that the caption doesn’t wrap, and you end up with something like this:
This happens because Live Captions use Text Variables technology, and Text Variables can’t wrap in InDesign. The workaround is to select the caption frame, and choose Object > Captions > Convert to Static Caption, and the text will then wrap properly. You will need to vertically resize the text frame to see the additional line of text."
without workarounds, is this fixed in CS6? I do not have CS6 to answer this question.
It works the same way in InDesign CS6 , check http://help.adobe.com/en_US/indesign/cs/using/WS328f5ee33f08f77d1e63e3 d123e8bcc67f-8000.html