I’ve also tried to replicate this, but the post contents show in the review queue:
The only thing I notice different in my screenshot and yours is that you seem to have a delete user option, whereas I don’t. I’m thinking this might mean you have another approval setting on top, but I’m not 100% sure. I’m going to try a few things out. Edit: Though looking at @Stephen’s screenshot again, the delete user is in that one too so I think that’s a red herring.
Do you have any plugins or theme components that would be interfering in some way?
Interestingly, when I tried it with a big post, the edit textbox resized itself to accommodate, so hopefully that’s a consequence of the same conflict, and if we solve one we solve both. 
