Info-refill-paragraphs is a variable defined in `info.el'.
Its value is

If non-nil, attempt to refill paragraphs with hidden references.
This refilling may accidentally remove explicit line breaks in the Info
file, so be prepared for a few surprises if you enable this feature.
This only has an effect if `Info-hide-note-references' is non-nil.

You can customize this variable.

This variable was introduced, or its default value was changed, in version 22.1 of Emacs.