jonsage,
OK, now I see how this is (not) working for you. You are expecting the rectangle widgets to dynamically resize to auto-fit the text as it gets reset in the repeater’s OnItemLoad, but Axure does not support this.
Not a wholly unreasonable expectation, and this is a known issue, as reported in this thread from four years ago, and this thread and this thread from two years ago.
It is not so much a bug, as it is the lack of a feature, and it has to do with dynamically resizing a widget to fit the text–not with the repeater’s “Fit Content to HTML”.
The feature request has been made, but obviously not yet implemented.
See josephxbrick’s trick to get around this–his basic approach could work for you, which involves manually setting the size of the widget after you reset the text, then putting that line of code in the OnItemLoad, making it “semi-automatic”. Only in his example, the text widget needed to resize its height (with a fixed width.) You’d need to resize the width instead, which gets tricky with variable-width fonts.