Yes this is a 3dsmax limitation. The only thing you can do is to undock it, resize, then redock. In 3dsmax 2011 it's become even worse: the height doesn't auto-adjust anymore either...
@PolyHertz: Hm that's not cool. The docking in 3dsmax for scripts is rather buggy, there's nothing I can do about it unfortunately. @michi.be: Again, a docking bug in 3dsmax. The only way you can resize it is by undocking, resizing, and redocking...
The development of the plugin version of the Outliner 3.0 is not going quite as fast as I had hoped. I've been quite busy with my MSc thesis, and the SDK wrapper isn't really helping much either. Because it's taking longer, I've decided to invest some time into porting the 'oid' version (2.1.4) to 3dsMax 2013 after all.…
#1: Is not a bug (unfortunately). It is a result of the recent rewrite of the nested layers system. The old system crashed 3dsMax when trying to merge nested layers, due to a bug in 3dsMax itself. So I had a choice of waiting for autodesk to fix it (we all know what the chances of that happening are), or changing the…
@Revel: I've tried to replicate the issue when dragging a max file into 3dsmax. It seems to work just fine for me...open, merge and xref cause no problems. Quite strange...