...I'm very embarrassed I didn't know about this function, I'll be sure to give it a try soon!
Ok, I tried it out, and I don't think the content size fitter was the solution. Try using the "Layout Element" component on STM. I remade your example scene, and the behaviour seems to be better, even with the code in Update() commented out. But I could still be misunderstanding the issue. (Text is going beyond the UI limit in my gif because I have the cutoff mode set to ignore)
