The Reflow Paragraphs item is available via the Reformat Text button on the collection toolbar, except when the Recycle Bin tab is active.
Reflow paragraphs deletes all single line breaks, and replaces them with a space. If two or more line breaks appear right after each other, those line breaks will remain.
In software that does not support automatic word wrapping, lines are terminated with a single line break, and paragraphs are terminated with two line breaks. Most email and newsgroup software also sends text this way, for compatibility with old email and newsgroup software. The problem is that if you want to edit the text afterward, the line breaks are not automatically adjusted, which ruins the layout of the text. AceText's Reflow Paragraphs command intelligently removes those superfluous line breaks, so the text will properly reflow and rewrap when you edit it in AceText or another application.
Almost all Windows applications support automatic word wrapping, and interpret single line breaks as the end of a paragraph. So does AceText. If you copied text with fixed line lengths, such as an email message, into AceText, use the Reflow Paragraphs command to be able to edit the text the way you would expect. If later you need to send the text back to an application that expects fixed line lengths, use the Limit Line Length command from the Reformat Text button's menu.
See Editing Clips and Text to learn how to use AceText.