Updating a Text Field (single line) custom field with more than 255 characters looses contents

Steps to repro:

1. Create a custom field of Text Field (single line) type
2. Set a value in this field via REST API and observe that it is set correctly
3. Update the value to be more than 255 characters via REST API

Expected:

It fails and the issue is left unmodified

Actual:

It fails and the field value is lost. No change is recorded into the history of the issue.