By squish, I mean the lines are too close together.
LOL – yes, i’m familiar with the meaning of squish. 
By “don’t really seem to produce” i mean your steps above don’t seem to make the lines closer together. Which is fine, I can just write that off – I just wanted to make sure I collected all your feedback so I can fix all the bugs.
Isaiah
This problem still exists in Stacks 3.0.2. Maybe this example will clarify the problem. I’m using ThemeFlood’s Volcano theme and FontStack to use Google Web Fonts. I have three lines of text in a Styled Text stack with text center aligned. The lines in the stack are separated by carriage returns. I’ve left the height as 100%. If Line space is set to Normal, Double, or Triple, then all is fine. When I change line spacing to custom and change it to 135% (or whatever), then the stack shrinks in width and shifts to the left of the page.
I’m afraid we don’t always fix every bug in every release. We fixed about 10 of the 40 or so known bugs – and had to release before fixing more because one of the bugs was critical for Mac OS X 10.11.
Bugs get fixed in order of their priority: data-corruption and crashes get fixed first, bugs that affect lots of users second, and so forth. This bug will get fixed, but it’s just not as high priority as some others since it’s a bit of a corner case.
Isaiah