My comment on long lines not being split was wrong. I thought I remembered such problems, but they must have had different causes. When using the → character, however, it must appear outside of the < menuchoice> tags to be displayed properly. That also looks better and is more readable imho, so I am still happy with using it.
I had also observed some problems when using the template in a bulleted list, which led to some misleading statements in comment on the template page. Those problems were due to line terminating characters being introduced in the wrong places in the template code and they are fixed now.
I also found a "more regular" wiki-syntax to achieve what you did with < span> tags. I don't think it makes much of a difference, but decided to use it just in case.
I have added a short description of this template as well as the Path themplate on the Typographical Guidelines page