«Undo« button

The undo button doesn't refund your purchase in a conventional sense; it returns your champion to a prior state.

So if you had 50% health when you bought boots, and you undo that purchase, it'll return you to the time before you bought the boots; that is, the time when you had 50% HP, etc.

This is to counter the abuse where people can buy health/mana items, undo them, and retain the HP or mana, essentially increasing the speed of your regen at fountain.

A drastic example, to illustrate: So if you were a tank, and you had 1/3000 HP at the fountain, and had enough gold for Warmog's, you can buy a Warmog's and resell instantly to gain 800 instant HP; repeat four times, and you can restore your HP very quickly without the need for Homeguards.

This is intended.