In a slot connected to QTextEdit's cursorPositionChanged signal I have:

cursor = editor->textCursor();
cursor.beginEditBlock();
cursor.select(QTextCursor::WordUnderCursor):
word = cursor.selectedText()
if (!word.isEmpty) {
replacement = find_replacement_for(word);
if (!replacement.isEmpty() && replacement != word)

}
cursor.endEditBlock();

If I replace say "cmd" with "command" using the above code when I undo interactively, all that happens is that the cursor is moved back to where it was after entering "cmd", i.e., com^mand.