I've never experienced issues with the auto-grow setting of the text area and I took a quick look in the latest version and everything seemed to be working as intended. Maybe you're experiencing a caching issue? Try clearing your browser cache. Alternately, try to pin-point what might make your text area work strangely. It is nested in a strange way? Is it hemmed in by other widgets? If so, try stripping away elements until the auto-grow feature starts working. At the very least that might tell you which combination is causing the problem.
Could there be some custom css that is crippling the functionality?