I solved this eventually by fixing all Auto Layout issues, fixing the height of the collection view using a constraint. Then, whenever I know the content has changed I update the value of the constraint using the value collectionView.contentSize.height:
self.verticalLayoutConstraint.constant = self.collectionView.collectionViewLayout.collectionViewContentSize.height;
Then the collection view is resized properly and it behaves nicely within the overall scrollview. I have updated the GitHub test project with my changes.
To me, doing this by updating the constraint manually instead of being able to tell iOS: “make the frame height of the collection view as large as needed” does not feel right to me, but it’s the best I have come up with so far. Please post a better answer if you have one.