Jupyter lab: ctrl + z shortcut only for selected cell rather than all modified ones

This is due to a document wide history function introduced in JupyterLab 3.2.

You have either to:
1- disable document wide undo redo (in in Advanced Settings Editor → Notebook,)

 "experimentalDisableDocumentWideUndoRedo": true,

and reload the page.
Or
2- install a 3.1 jupyterlab with pip install "jupyterlab<3.1" or if conda conda install -c conda-forge "jupyterlab<3.1"

See: @krassowski answer: How to undo/redo changes inside the selected cell in Jupyter notebook?

Related Github issue: https://github.com/jupyterlab/jupyterlab/issues/10791

Related Changelog: https://jupyterlab.readthedocs.io/en/stable/getting_started/changelog.html#id116