Overflowing A Local Varchar

If I declare a local variable in a cursors query and append values to
it with successiuve concatenations, how come SQL7 does not report an
error if I concatenate a value to it that will overflow it's declared
size? Specifically,

DELCARE @t varchar(5)

....

SET @t = '12345'

....

SET @t = @t + '1 more'

The concatenation of '1 more' does not signal an error. In fact, you
can do any number of successive concatenations and none of them will
report an error.

Shouldn't SQL7 be reporting an error?