This is due to the white space of the CSS property, which is set to nowrap in the default ui-select stylesheet.
You can change this behavior by adding this to your own css:
.ui-select-bootstrap .ui-select-choices-row > a{ white-space: normal; }
This will change the behavior of all ui-selects on your page. If you want to change only one, you can wrap it in a div:
<div class="multiline-select"> <ui-select (...)> (...) </ui-select> </div>
and change the css selector
div.multiline-select .ui-select-bootstrap .ui-select-choices-row > a{ white-space: normal; }
I split your plunkr to show the result http://plnkr.co/edit/IplCxLbnPoIW4TJx1HIx?p=preview
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