If you define a custom ContentTemplate with a TextBlock element inside of it and then set the TextTrimming or TextWrapping property of the TextBlokc, the value is not respected. Instead, the default TextTrimming/TextWrapping from the RadCallout control is used.
Note that this happens only for the first TextBlock in the template.
To resolve this, use the TextTrimming and TextWrapping properties of RadCallout. Or alternatively, define an empty TextBlock in the template and add another TextBlock for the text after that.