Commit 148833e9 (released in 3.0.4) changed undo's behavior in vi mode

It looks like undo behavior when undoing inserted bytes changed unexpectedly between 3.0.3 and 3.0.4.

• Behavior in versions <=3.0.3: an undo (the u key when in nav mode) would undo an entire insert at a time. For example, if the user is in nav mode, hits i to enter ins mode, types asdf, hits esc to get back to nav mode, and hits u, all four characters of asdf would disappear.
• Behavior in versions >= 3.0.4 (including master): a vi undo works on a character at a time. If the user is in nav mode, hits i to enter ins mode, types asdf, hits esc to get back to nav mode, and hits u, only f disappears.

Bisecting the codebase led me to commit 148833e9, and stashing random stuff tracked it to this specific change: https://github.com/prompt-toolkit/python-prompt-toolkit/commit/148833e982cc0ed427a862e0d2725b353af39d04#diff-5324a319d7483c6ee86efe14bfdd6dc1ed139f1b6046461681e209b6fc3b79fdL41

I mirrored it here for completeness:

diff --git a/prompt_toolkit/key_binding/bindings/named_commands.py b/prompt_toolkit/key_binding/bindings/named_commands.py
index 4796cf7c..17c1c5c4 100644
--- a/prompt_toolkit/key_binding/bindings/named_commands.py
+++ b/prompt_toolkit/key_binding/bindings/named_commands.py
@@ -38,8 +38,12 @@ def register(name: str) -> Callable[[_T], _T]:
     """
 
     def decorator(handler: _T) -> _T:
-        " `handler` is a callable or _Binding. "
-        _readline_commands[name] = handler
+        " `handler` is a callable or Binding. "
+        if isinstance(handler, Binding):
+            _readline_commands[name] = handler
+        else:
+            _readline_commands[name] = key_binding()(cast(_Handler, handler))
+
         return handler
 
     return decorator

I am not sure of the implication of this change or why it would cause the observed change in behavior, though...

Start with prompt_toolkit/key_binding/bindings/named_commands.py and inspect the register change introduced by commit 148833e9. Reproduce the vi-mode sequence described in the issue and trace how undo handles the inserted bytes. Done means undo once again removes the complete insert, with regression coverage added if the existing test layout identifies a suitable location.