If so, when does it happen?

I'm not a doctor but my surgeon did say that if you continue to overeat your stomach will stretch but it will never be a "normal" stomach size again. It's like anything I suppose - if you push and push, something will have to give...

Yup what Lila said. The stomach is made out of stretchy membranous stuff and has a remarkable ability to expand and contract.

Think of it this way, you USED to have a weather balloon for a stomach, able to expand to incredible proportions, now you have a small party balloon for a stomach, still able to expand but not nearly as much. You cannot possibly put that much continuous pressure on it to expand it back to previous proportions.

Now as to WHEN, seems like at about 6 months you start to notice and increase in capacity and at about 1 year you will be able to eat a good portion of food. It is important at these times to NOT fall back to old bad habits or create new bad ones. If you constantly graze high fat high caloric food then you WILL have issues with NOT losing or even gaining weight.

The sleeve is a tool, a tool that gives us remarkable control over what WAS uncontrollable: our appetites. Another organ can betray us and trick us into the same old bad eating habits: OUR BRAIN. You not only have to keep your diet in order but have to keep your mind right as well. If there is sufficient WILL, or better put insufficient WILL POWER then there is always the possibility of bypassing the benefits of the sleeve. Like I said the sleeve gives us a distinct advantage we never had but ;leave it to us as a species to STILL screw it up if we take advantage of it.

Sticking with a diet is MUCH easier with the sleeve, most of the hunger pangs are gone and you have much more control.

To add to what Rootman said, they removed the fatty portion of the stomach that stretches the most. What is left is the more muscular part of the stomach that is not as prone to stretch. However, it will give over time, but like was said, will never be the same size it was before. So you will always be able to use this tool when you need to. Or not, as the case will be.