It seems bash and dash handle this differently - I presume your /bin/sh is bash. I'll see what I can do.
I thought I've set the default to dash, let me check...
No, I've got it set to dash.
EDIT 1: Something ocurred to me, and I checked, and yes, it's connected with UTF-8. It only doesn't line break with UTF-8 characters in the message. Also, some of them are still garbled, but some not, so will try to determine if it's only with some, will do some more tests.
EDIT 2: No, it seems to be doing it with all extended characters, i.e. once UTF-8 is used, it doesn't linebreak.