Three possible options, I have not pulled apart the game at this point to see what goes.
2) Fixed length menus
3) New line commands.
1) Games do not know when a new line starts, or indeed a section of text ends. To this end they often have pointers, these are numbers that indicate where something starts/ends/does something (I usually like to make an analogy between them and the contents page of a book). There are many types of pointers and ways games, especially on modern consoles like the DS, handle such things. Typically there are numbers before the text section that count from the start of the file, however this is far from universal.
2) Menus are often a special case in games. Here they might well be hardcoded to a certain length somewhere. Working around this can be hard, however there are also cheat methods like combine multiple characters into fewer tiles. I usually like to do this with double l, i,j..... type characters but you can do it with others too. Often with fixed length things you will see the extra space padded out with blank characters.
3) Though games often use pointers for this job they can still have a new line command somewhere in the text, or a length value somewhere in the text.
2 and 3 can be combined too to give something like a new line every ? characters regardless.