Setting the language for all the text using Tools -> Language -> For all text does not remove the red wave lines from under correctly spelled words. This seems to be a UI issue since there no longer is an option to correct the allegedly misspelled words. In my specific case, German is the default language and I tried to change the language of the document to English when I encountered this bug.
Seems like a duplicate of bug 98903. *** This bug has been marked as a duplicate of bug 98903 ***