Consider the following text: ----begin example----
---
---
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do
---
---
----end example-----
With auto-fill mode on, continuing to type on the "Lorem ipsum" line results in the following:
----begin example----
---
---
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do
---eiusmod asdf
---
----end example-----
Notice how "eiusmod" does not start on a new line, as would be expected.
Tested with emacs -Q, org 9.3 (lisp that ships with emacs 27)