Retagging posts has always bumped them up the active questions list, it's not a new feature.
To be honest I think I disagree with you that it's undesirable.
Retagging questions should bump them up to the top of the page. The reason for retagging questions is because they have the wrong tags in the first place. If a question has been tagged incorrectly ...
Yes, this is a known thing: Raise the rep bar on late answers
The short answer is we recently expanded the pool of people eligible for having their late answers added to that queue. It was very effective in terms of adding more review tasks because it wasn't time limited. All eligible answers going back to the start of the site got added a few days ago, ...
My guess is that something was changed in the algorithm to determine what constitutes a late answer. Especially since many of the "late" answers were given years ago.
I've cleared the queue in the mean time, but it didn't seem like anything to worry about.
Someone with enough reputation to make post edits has made an edit to the question, just before you had posted a suggested edit. That edit went in.
A couple of hours later, your edit got approved. It overwrote the prior edit.
It is an edge case.