Took a while to reproduce the actual case, and it's Select-String that's at fault. And it must be in "powershell" not "powershell ISE".

  'troll' * 1000 > troll.txt

.. works fine as you say

  Select-String -Path .\troll.txt -Pattern "t" > t.txt

.. wraps the output at the console width. Which means you can't use it as a grep replacement.

You can't use it as grep in bash, because it isn't that. It outputs [MatchInfo] objects, not text, and Out-File (>) formats complex objects for console viewing (for ??? reasons), which is one reason > isn't a great PS habit.

    Select-String -Path .\troll.txt -Pattern "t" | Set-Content t.txt

    or

    sls 't' .\troll.txt | sc t.txt