Hmm, what were your steps where it worked?

Undo and other text editing facilities aren't completely nonfunctional, they just become broken and unpredictable. For example, these steps:

1. Load http://facebook.github.io/draft-js/ 2. Click in the text box 3. Type 'hello' on the keyboard 4. Using the mouse, choose Edit -> Undo

The text box will show "h" instead of being empty. Do you see this too?

Note that cmd-Z won't reproduce this since the page tries to handle that itself to work around these bugs.

It surely does, because it's a crucial feature for a text editor, but the developers had to implement and undo/redo stack in their lib.

Anyway this approach is the only good one if you don't want to produce crappy HTML that will end up on your site. TinyMCE and the rest are obsolete, and editors like DraftJS or mobiledoc-kit are the only viable solutions until browsers offer a new, not broken alternative to content-editable.