In meld-1.2 Preferences->Editor->Misc->Line Wrapping, I get an empty selection menu. Going back to 1.1.5 gives me an actual list to choose from ("None", "Character", "Word"). It seems to me that in meld-1.2, meldapp.glade is incomplete (it's missing the menu in question).
Created attachment 171734 [details, diff] Fix The fix is taken from current trunk
added to the tree as meld 1.2-r1, thanks for reporting.