I guess what I'm saying is that it would be easy enough to exploit. If you risked the move, but ended up having a character wounded, you could just roll it back. However, that defeats the purpose of having taken the risk in the first place.
I don't see it as a risk. AFAIK, any hostile NPC that approaches, (but does not reach) the PCs... end their turn with Guard; unless it's not an option. So you cannot use this to test if the opponent is guarding before closing on them. Undoing a move is just that. Many, many times I have accidentally tapped a key that moved the PC too far, or not in the intended direction; especially when playing on laptops. The undo feature allows one to correct mistakes.
So long as the NPC re-arms their guard attack after an undo, I don't see how it could be exploitive to undo the accidental damage from that attack. Undoing a move is effectively having it never have happen, so retaining the injury from something that never happened, always seemed kind of bizarre to me.
What is to stop a player from doing this continuously until the monster misses or the damage is less?
I mentioned this in the post above. If allowed, that would be an exploit; but if the attack repeats (exactly) during that move... if they had hit them before, they'd hit them again.
**One plausible exploit of this is that by being able to see the damage, they can decide whether or not to keep it—or undo; not cool. That would let them choose (after triggering the Guard attack) to attack with sufficient remaining hitpoints—or to retreat (with undo, as though it never happened) if they don't have enough to survive the melee.
That could be the reason that the games don't undo the damage. (Was this your point as well?)