I was looking for the same answer.
I just watched this video: https://developer.apple.com/videos/play/wwdc2022/10041/
Around 26:50 it's about the identity Apple Wallet buttons and I tried it out for the PKAddPassButton, it's the same principle (checked in iOS 15.5):
The button itself decides, if the title label has one or two lines, depending on the space it has.
Topic:
App & System Services
SubTopic:
Apple Pay
Tags: