bug#21523: 25.0.50; Undo with active region adds extra text

[Eli Zaretskii]

> From: Lars Ingebrigtsen <larsi@gnus.org>
> Date: Mon, 16 Aug 2021 14:39:15 +0200
> Cc: 21523@debbugs.gnu.org
> 
> Drew Adams <drew.adams@oracle.com> writes:
> 
> > The Subject line is not very clear.  Here is a recipe.  You decide
> > whether the behavior is correct or a bug.  FWIW, this behavior is at
> > least as old as Emacs 20 (with transient-mark-mode on).
> >
> > emacs -Q
> >
> > In buffer *scratch*, put point before "that" on the last line.
> > `M-c', to capitalize "That".
> > `C-SPC C-e', to select the text after "That", up to eol.
> > (The region does not contain the word "That".)
> >
> > `C-_' to undo the last change within the region.
> > The word "that" is inserted, giving this:
> >
> > ;; then enter the text in Thatthat file=A1=AFs own buffer.
> 
> This bug is still present in Emacs 28.

Why is it a bug?  What is the expected "non-buggy" behavior in this
case?