I have the following entry below and it work just fine. Try removing other file type specific configuration to ensure its not being overridden.
softWrap = false
Also do check the "global" defaults under
TextMate.app/Contents/Resources/Default.tmProperties
If you haven't already seen https://gist.github.com/1478685, do check it out. The tm_properties in your most immediate folder should take priority. So try and remove other setting and just test it with this one.
Alternatively, remove all other tm_properties and just leave the "global" one and test it out.
Finally do check out this discussion and the version of TM2 you are using. There have been certain fixes to softwarp, and it could just be a bug that you are facing.
EDIT
Also just FYI, I found this item in the latest release notes of TM2.(2012-02-18)
- Cached .tm_properties files are now observed via kevent so changes invalidate the cache immediately (previously it could take up to 30 seconds before the updated file was read). On file systems without kevent support you need to relaunch TextMate to flush the cache.