Some applications have a bad habit of disturbing and confusing Illy. The usual suspects include
Some Firefox Add-ons,
and there are undoubtedly others.
It may be worth finding out whether one or more certain other applications are active when it happens.
It depends on how you select the frame. To be able to resize click on one of the sides first, not a corner anchor.
Nothing else is running.
I've tried clicking on the side with both the select tool and the direct select tool, I've tried selecting using a marquee. Neither changes the behavior. This is a type box that's threaded to another text box, but it always has been and everything worked fine until it didn't.
It's hit or miss here as well.
An easier method is to simply turn on the Bounding Box if it's off, then use the Selection Tool to drag the Bounding Box handles. You can then turn off the Bounding Box again if you like.
I dislike the bounding box so I tend to use the shortcuts - Command-Shift-B, v, drag handles, Command-Shift-B. It becomes easy once you do it a while. This is much easier in my experience than using the Direct Selection Tool and dragging the paths specifically.
With AI CC 2014.1 , you can do it quite easily .
With Auto Size Type feature introduced in AI CC 2014.1 , text box automatically adjusted its height according to the content inside the box .
To use this feature double click on the widget appearing at the bottom of text box .
For more details please look at : https://tinytutorials.wordpress.com/2014/10/14/illustrator-cc-2014-october-area-type-optio ns-auto-resizing-text-box/