Magic Reflow will reflow or rewrap text in a variety of situations, ranging from paragraphs, to comments, to bulleted and ordered lists (of the variety commonly seen in Markdown and the like).
It is a replacement for the built-in autoflow package -- it handles many of the things that autoflow handles, and a lot more:
...and various combinations of all of the above.
Note that if you use one of the popular Emacs-emulation packages, you may have to add the following to your keymap.cson to make the keybinding work:
'atom-workspace atom-text-editor': 'alt-q': 'magic-reflow:reflow'
You can also use the "Reflow Selection Magically" context menu option, or the "Edit > Reflow Selection Magically" menu bar option.
Good catch. Let us know what about this package looks wrong to you, and we'll investigate right away.