I have just checked, and it is working properly for me using Firefox 33, but using Mercury browser on the iPad, it is behaving as you describe.No, no better. The pop-up edit window is disabled, but the "more options" stand-alone edit page also opens as large as required to accommodate a long post, and scrolling down to the later text pushes the toolbar off the top of the screen.
Does the same not happen in other browsers?
For reference, the previous version of Xenforo opened edit panes which were no bigger than the screen, and text scrolled within them.