I think this is a bug, otherwise the override feature is severely handicapped.
I’ve created a Button Component. When I change the text in the Overrides, the size of the widget does not change with the text length. The widget has padding defined and “Fit to Text Width” is on but the override text still goes outside of the widget.
This is as intended. The components feature in RP10 is simply a renaming of their masters feature in its current state and will not behave the way you want it to. Hopefully they have plans to enhance it with your desired behavior.
In my opinion it’s a major shortcoming. This would be perfect for buttons, cards, and the like if designers could set this to increase width or wrap with height as txt increases and maintain padding.
I got excited when I saw “Components” and expected the same behavior as elunnin. So +1 to making this a real components library.
Yes. The feature to resize Component instances (automatically or on user’s demand) is very essential in order to reuse components in several instances. This is a major gap today, and the lack of such flexibility creates a huge resistance for designers to use the Components.
I’ve had this question for a while as well. not sure if RP10 does this now, but wow, Sketch has been able to have dynamic masters/components for years now and Axure is still behind… how is this tool so advanced yet so archaic at the same time?
What I usually do is try to incorporate some sort of logic that uses the character count / length to estimate the width as best as possible. Of course, this doesn’t let thing like icons positioned at right to move as well, so you need to program that movement in as well.
Basically, just learn how to implement the actual code and you’ll be better off 
Hello!
This behavior will now work better in the latest builds of RP 10. A widget’s width will now adapt to the overridden text. If the widget has text “BUTTON” and fit to text width is enabled, for example, and has a text override of “BUTTON BUTTON”, the width of the widget will automatically expand to accommodate the longer text.
Let me know if I misunderstood or you have any feedback on this. Thank you!