If you need to workaround this situation, the text file printed to disk by AppleWorks can be read into AppleWriter or a BASIC program. You can then replace all spurious carriage returns with spaces, taking care to recognize and preserve carriage returns at the end of paragraphs.
The feature of putting a carriage return at the end of a line was added because many people had problems transmitting text with lines longer than 255 characters.
All previous versions of AppleWorks printed to disk a file with carriage returns only at the ends of paragraphs.