Here at my job we just updated to CS6 and I'm now using "Auto-Size" text boxes too. I use InDesign and my editors use InCopy. Just like you've said, I set the auto-size in InDesign and it works just fine, but when the editors type in to the boxes the boxes do not expand. This is very disappointing. Come on Adobe, give us a fix for this sooner than later. Liotta's post was 7 months ago.
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We've had all sorts of problems with this feature as it should've worked straight out of the box but after some testing we have found that its something to do with the way you open the actual file in InCopy. Which is far from ideal and should have been UAT by Adobe before release.
This will not work consistently work if you open the designed .indd or .icma file in InCopy using the file open command within the application.
If you need this to work, the InCopy user has to open the .indd or .icma file by dragging and droping from OS windows explorer into InCopy, we use Windows 7 acrros all the teams. Check out .icml files add text changes to the set auto resized frames, this process will expand/collapse the frames to fit the content but as you have to use the drag and drop method to open the .indd and .icma file, 2 users cannot access the same time doc at the same time (a serious flaw in the programming architecture!) which stops people working in parallel. Save changes, check in .icml content and close .indd or .icma.
However the flaw comes in if you then open the .indd and .icma file in InCopy using the file open command within the application, before an InDesign user opens and saves the file (updates the design). The corrections added in the previous stage above, will not show the frames expanded/collapsed to take in the added text and instead show over matter???? The only way around this is to ask an InDesign user to open, update and save the design that way the InCopy user will see the same result no matter what file open method they use.
Another suggestion is to design the page to have some of the auto resize frames anchored within main body of text and that way the frames will expland/collapse when checking out and editing the content. However, this does cause issues with InDesign crashing etc. so we have tried to stop this method within the working group.
Have you experienced other more serious issues with InDesign crashing consistently when re-importing .icml files? See other forums here:
As far as we can see this is a major flaw in how the application(s) work, we have an enterprise agreement with Adobe and purchase a large volume of Adobe products globally but so far the technical support team are unable to find a solution to this and I'm not hopeful of any resolution soon even with the new release of Adobe CC.
So, the year is 2016 and I currently have the same issues with the latest versions of Indesign and Incopy CC.