When deleting characters and words in a line, or deleting to the end of the line, stedi stores the original contents of the line in the undo buffer. Any deletions of this type that are made all on the same line can be restored with the undo key. The delete commands that are relevant are the two character delete commands <Backspace> and <Delete>, the delete word commands Ctrl-X and Ctrl-Z/Ctrl-Y, and the delete to end of line command Ctrl-D.
In addition, in some instances, contiguous characters that are deleted sequentially using these commands can be restored with the undo key, regardless of whether they are on the same line or not. Thus if you hold down the <Delete> key and delete several lines, they all will be restored. In general the above deletes are remembered as long as they are in lines that are inside lines that are already in the undo buffer or in lines that are adjacent to lines in the undo buffer.
In the case of these deletions, after restoring the deleted characters they can be deleted again by a second pressing of the <Undo> key. In that sense, the undo key acts as a toggle between the original lines and those from which some characters were deleted.