updated for version 7.3.1200
Problem:    When calling setline() from Insert mode, using CTRL-R =, undo does
            not work properly. (Israel Chauca)
Solution:   Sync undo after evaluating the expression. (Christian Brabandt)
diff --git a/src/edit.c b/src/edit.c
index 4eab20e..413740f 100644
--- a/src/edit.c
+++ b/src/edit.c
@@ -8126,10 +8126,8 @@
     --no_mapping;
 
 #ifdef FEAT_EVAL
-    /*
-     * Don't call u_sync() while getting the expression,
-     * evaluating it or giving an error message for it!
-     */
+    /* Don't call u_sync() while typing the expression or giving an error
+     * message for it. Only call it explicitly. */
     ++no_u_sync;
     if (regname == '=')
     {
@@ -8142,6 +8140,9 @@
 	if (im_on)
 	    im_set_active(TRUE);
 # endif
+	if (regname == '=')
+	    /* sync undo, so the effect of e.g., setline() can be undone */
+	    u_sync(TRUE);
     }
     if (regname == NUL || !valid_yank_reg(regname, FALSE))
     {