Seems as though a few people have had issues with this. It’s a massive pain as I rely on the undo function quite heavily.
Have tried clearing the cache and also reinstalling the desktop app but the issue still persists. When I close and restart the app it works again for a short period, but then maybe after 5 or so minutes the undo function stops working again.
Hoping Figma support sees this as it’s most likely a bug.