Yes I use this and it does word wrap as the OP requires for the specific text scaling applied – if you choose to zoom more then you get no further wrapping.

I have the opposite problem which is that since Lollipop this text scaling setting keeps changing itself and my fonts seem to get bigger and bigger – I keep needing to go back in and scale it down again. I seem to be the only person with this issue since I find no postings on the subject.