That looks like a bug. If you increase your base font size, you will see the space increase. Also, if you inspect the layout at runtime, you will see the content size to be calculated as too big.
My guess is, UILabel takes your original font size (40) to calculate the content size for 3 lines of text and does not take into account that the font size has already been decreased before truncation.
I fiddled with content hugging/compression priorities but could not make it work either.
The only workaround I found was to manually set the font size down to 20. That will get you the frame you want.
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