Yes. It does autoconvert SMSes longer than 480 marks (3 * 160 marks - 160 is one standard sms lenght nowdays). And it is not only Galaxy S3 or Samsung's hardware 'problem' (depends who consider that a 'problem'. personally I also did prefer, and still do, original sms soft. even with its limitations, like lack of scheduling function, etc.)
This feature raised after Android 2.1 and I encountered I before I got my current Galaxy S3 GT-I9300. Yet i Still did hope that ICS (droid 4), which was the initial version of my phone had no 3 sms restriction but I hoped wrong. Droid 4 and above since current latest update stll has the same limit. So if you wish longer smses as 480 marks you have to use some 3rd party app.
Some additional information.
Anything over 160 characters, technically, it is no longer an SMS. The stock Messaging app, and others too, allow for "longer" messages but it is just splitting up the messages in to 160 characters. In eclair (android 2.1) a message will be converted to an MMS after it exceeds 480 characters. At that point, the default Messaging app will no longer split up the messages, instead it just sends it as one MMS. If you are using a 3rd party messaging application and find that you are still being charged teh MMS rate, it may be that your carrier is grouping messages that come through "at the same time".