WrapPanel lays out items in one long horizontal line (displaying scroll bars) instead of wrapping lines
You need to make the horizontal scrollbar of the second ListBox disable.
<ListBox ItemsSource="{Binding}" ScrollViewer.HorizontalScrollBarVisibility="Disabled" ...>....</ListBox>EDIT
Addtionally, there is reason that you use ScrollViewer for the first ListBox? Why I ask is that ListBox already has ScrollViewer internally, of which default Visibility is Auto.