Very easy to reproduce. Attachment has a fully functional example.
It happens when you have a variable that concatenates Strings from a group.
When you put this variable to show in a text field in the group header or footer, the text field is unable to stretch it's height as any text field should.
I noticed that this happens when the variable is set to reset on group change. If I set the reset type to "none", it stretches normally.
I'm sure the variable is holding the full content of the concatenation. You can check this by increasing the height of the text field.