Hello, Charles,   

Indeed, the NullText is not wrapped if the WordWrap property is enabled. But it is a nice to have feature:

            this.radTextBox1.Multiline = true;
            this.radTextBox1.ShowNullText = true;
            this.radTextBox1.NullText = "1. Once upon a time 2. Once upon a time 3. Once upon a time END";
            this.radTextBox1.WordWrap = true;

I have logged it in our feedback portal by making this thread public. You can track its progress, subscribe for status changes and add your comments on the following link - feedback item.

I have also updated your Telerik points.

Currently, you can split the NullText in multiple lines by using Environment.NewLine. Please refer to the below code snippet:

            this.radTextBox1.NullText = "1. Once upon a time" + Environment.NewLine + "2. Once upon a time" + Environment.NewLine + " 3. Once upon a time END";

I hope this information helps. If you need any further assistance please don't hesitate to contact me. 

Regards,
Dess | Tech Support Engineer, Sr.
Progress Telerik