It is not a BIG problem for me — it is a complete SHOWSTOPPER.
Publisher simply is not able to recognise the actual Thai words—it seems to rely on the space character, and a few others, to define word boundaries. In Thai, however, although there is a space between sentences, there is no space between words. It will therefore never break lines correctly until this is fixed. Which I hope it is one day soon.
Until then, to my great sadness, I have to use InDesign, Word or Pages (on Mac) to set Thai properly.
And since most of my work these days involves Thai characters, it means that Publisher sits completely unused in my Applications folder.
Sad.