Author seems to still have some kinks to work out when it comes to getting text to flow between pages and text boxes, but as long as you know the tricks, you can get it working just fine.

To get text to flow, you need to add text boxes to your Layout pages. For each text box, turn on “Editable on pages using this layout” in the Layout Inspector. You also need to tag the text box. Author uses tags to know what kind of text should go in each box. Then, if it runs out of room in one text box, it can just find the next text box with the same tag and flow the rest of your text in there.

Note that you can only use a tag once per page. However, if you tag a text box, and then create a new linked text box by clicking the blue arrow on the right edge of the box, near the bottom, your new text box will share that same tag. When you switch to your regular text pages, you can add more linked text boxes from your default layout boxes by clicking the blue arrow and clicking again on the page.