This feature allows you to have the text formatted in a very simple way: the text will be wrapped, so that no lines exceed a maximum number of characters per line, unless there is a longer string of non-whitespace characters.
If enabled, it has the following effects:
While typing, the editor will automatically insert a hard line break after the last whitespace character at a position before the maximum line width is reached.
While loading a document, the editor will wrap the text in a similar way, so that no lines are longer than the maximum line width, if they contain any whitespace allowing that.
There is currently no way to set word wrap for document types, or even to enable or disable the feature on a per document level. This will be fixed in a future version of KatePart.