>>> The problem appears to be the lines:
 >>>
 >>> (size
 >>>              (window-text-pixel-size window from to max-width max-height))
 >>>
 >>> As the max-width will be larger than the current frame (meaning the
 >>> height calculation will not take wrapping into account).

I think MAX-WIDTH should be nil here.

 >>> One possible fix is to set min/max height/width based on `only' to
 >>> (frame-parameter frame 'width) / (frame-parameter frame 'height) but I
 >>> do not know if that is the best fix.

This would not work.  The 'height' frame parameter counts in characters
while 'window-text-pixel-size' wants pixels as X-LIMIT.  Also, the sizes
of frame and window decorations would hardly match.

 >>> If that is done, then it may be possible to remove the rest of the
 >>> special handling for `only' that sets width/height to nil and handles that.
 >>
 >> I think you're right, but I'd like to hear if Martin has any comments.
 >
 > Sounds good. The most minimal change I can think of is to use the
 > current frame's width as max-width in the window-text-pixel-size call
 > when only is set to vertically. I don't know of any reason we need to
 > constrain max-height in that call because it doesn't have the same
 > impact. That can be done either explicitly in that call or by changing
 > max-width to be set to the current width as I described before. That
 > would be asymmetrical with max-height though, which would be rather
 > confusing IMO.

Please try the attached diff.

Thanks, martin