I'm not assuming that, but then you can't assume the memory is sufficient either. If the string is from network or user, then you can never assume the buffer to be of sufficient size (which they definitely do, because they aren't tracking how much of src was copied into allocated dst).

Each line, individually, is total nonsense.

It never makes sense to use strlen() for an argument to strncpy(). Only the size of the destination buffer makes sense for strncpy() (usually sizeof(dst)). For other cases you would probably use memcpy().