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Variables are treated as a single character, so they don't wrap and they can't be edited to format some parts differently fom others.
that seems a bit counterintuitive as the text that can be pulled into the variable is often longer than a single character. So in essence I will need to convert the text variable to static text every time the text runs longer than a single line in the box? Hmm.
Text variables are treated as a single character and thus will not wrap. You’ve already discovered the workaround.
The variable itself is just a marker -- a single character. You cannot select the text inside the variable, only the marker and it's content, without converting to text real text first. This is a requirement/byproduct of the variability.