Ok, never mind. Solved here by a more experienced co-worker... Because the field is of type CHAR it is padded with blanks (a rather foolish SQL-legacy, IMHO). So the string gets appended after the blanks, and is then chopped off to fit the width of the field...
The work-around is to either use VARCHAR or append the suffix to trim the existing value before appending it:
UPDATE #Meow SET comment = rtrim(comment) || 'Meow'