This idea sounds alot crazy.
Just wait until I go down to a shop, make payments for a goods, and undo the transaction on my way back home.
You can already do that if the shop accepts RBF Transactions. There is no need for a new protocol to undo a mistake. Not to mention that Bitcoin is not a system that should allow human mistakes anyway. It would be cool if there was a way to cancel every single mistake and ONLY mistakes, but that is impossible. The safest method is to not allow them at all and ignore every mistake that happens by not even being able to distinguish between a mistake and not. The main idea is very basic. You either take your time to do things right or you blindly do it. If you blindly do it, expect nothing good.
And besides, this idea will give miners more work to do than they already have today. So, let's just stick to the rules.
Not just that. I can undo the undo that I undid before undoing my undone Transaction. That is six Transactions in a row and the most distant time span it can happen in is approximately 300 minutes or 5 hours. This can become really tiring for the Bitcoin Blockchain and could clog it up almost immediately if enough people do it often enough.
Imagine the bots who sweep vulnerable and publicly known Bitcoin Addresses people still end up sending Bitcoin to. Bot 1 sweeps it, bot 2 undoes the Transaction. Bot 1 undoes the undone. And so on, until either one of them gives up or the Miners take most of that amount and the change of a few Satoshis stay in the Address until another Transaction is received only to be fought for by the same bots.
Stupid idea.