Yes, it make sense
...if the only other choice is a 1-line input box.
One line input boxes are terrible for editing long text (i.e. significant box overflow), for reasons that are almost completely obvious. They're bad on the web and even worse on tablets or mobile phones.
If you have no other way to create space for the long paths, then a multi-line textbox will work better than a 1-line input box. An expanding textbox is better than a fixed-height textbox.
Here is an example of the expanding textbox for editing file names in Windows 8:
Here, Microsoft could have provided more horizontal space or a pop-up edit box, but they likely decided that the benefits of "in-flow", inline editing even with the awkward text wrapping outweighed the costs of providing out-of-flow edit boxes.