Updates:
        Status: WontFix

Comment #2 on issue 260 by [email protected]: Concealed text causes vim to wrap before window width
https://code.google.com/p/vim/issues/detail?id=260

This is how it is expected to work. Wrapping works on the actual characters, no matter whether they are not visible or replaced by another character. It would be possible to add an option to make it behave the other way, but it's going to be a lot of work (and slow).

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