This may be the intended outcome, but I would prefer to have the callout margins go further to the edge than they currently do. The 1st screenshot is just plain with no additions to the text. The 2nd and 3rd screenshot shows the 2 formatting options. See how the text in the callout margin is much closer in from the right?
Yes, that looks correct. “Sides” doesn’t fit next to “both”, and “continues” doesn’t fit next to “who”, so the wrapping happens at those points.