I noticed that the UNDO button on my WORD documents are GREYED out when I apply a sensitivity label. The issue happens only to WORD, no issues with EXCEL or PPT files.
Those who don't have the MIP feature not enabled yet, don't have any issues with the UNDO button.
The issue happens to any word document (Old or new).
It does not matter if the document is Auto Saved or manually saved.
My Office version is
Microsoft® Word for Microsoft 365 MSO (Version 2204 Build 16.0.15128.20278) 64-bit