Thank you for pointing this out. I just had a look at it and you are right.
From the manual:
Segments are by default paragraphs defined by the file format itself.
Not using sentence segmentation on a document is equivalent to using paragraph segmentation. In that case, each paragraph (as defined in the original document format) is displayed as a single segment, and the translator is free to reorganize the sentences within the segment in the translation.
Paragraph segmentation works well with more literary or creative texts, as well as, more generally, with documents for which translation memory matches are not so important.
Maybe CafeTran Espresso will one day get segmentation per paragraph for Ms Word files. This would be especially useful when using AI.
[Edited at 2025-02-01 09:27 GMT]