In POSIX, a text file is a file consisting of zero or more lines. A line is a sequence of non-null characters, shorter than a system defined maximum and terminated by a line feed character.

So a file that completely matches the string "one two\nthree" is by POSIX standards not a text file. Of course, wc doesn't necessarily operate on text files so you could interpret the result as a "complete POSIX line count".