When you add a static text box by clicking on a point on a page (without dragging to size the box), a next text box is created with the bottom left (origin) of the first letter at the position of the click. You can start typing straight away, and the text box will grow as needed to accommodate the text as it is typed. To exit typing mode, click with the mouse anywhere outside of the box. If you click on an area of the page that doesn’t contain another static annotation, then the text box remains selected, which is handy if you want to nudge it a few pixels with the arrow keys (as you might do when filling in non-interactive forms). If you click on another annotation, then that annotation will become selected.
You can also add a text box by clicking anywhere on a page and dragging to size the box before releasing the click. In this case the text box will have a static size as you type. It will neither grow nor shrink.
An auto-resizing text box remains auto-resizable until you manually adjust its size by dragging one of the control handles when the text box is selected but not in typing mode. Once it has been manually resized there is no way to take it back to auto-resizing mode.