• Type 'abc def' (without any long pauses)
• Press undo (you now have 'abc ')
• Type 'ghi'

'def' is now no longer been in your undo stack

• Reload the page to have it restored by auto-save
• Press undo several times

Observe that can you get back to the 'abc def' state, because auto-save replayed the entire transaction history into the undo stack.