ST2 version 2.0.1 build 2217

On OS X (10.7.4) when I select all (super + A) the text and then wrap the text at the ruler, I see a flashing insertion cursor at the end of every line. If I type a character, that character is inserted at every line.

If I hit Escape, then the multiple insertion cursors go away.

Any ideas what is going on?

Sounds like you’re pressing Selection > Split into lines.

Nope. I use the Edit menu – Edit | Wrap | Wrap Paragraph at Ruler.

And I just confirmed the same phenomenon on Windows.