It is possible that you failed to change the contour line, but were changing shape of the image frame instead.
Take a look at the screenshot below: "Use Contour Line" is used for text wrapping for all figures, but, during shape editing in case 1 (top right), I haven't selected "Edit Contour Line" in editing dialog, so nothing actually happens (same as in your screenshot). The reason is simple: I actually changed shape of the image frame, not the contour line which remains the same. Notice the two gray lines: one is full and it shows shape of the frame, while the other is dashed and it shows contour line.
In case 2 (bottom right) "Edit Contour Line" was selected in editing dialog, so text get wrapped as expected.