Why is this a thing? You can make someone look like they insulted a person for nothing when they really didn't by editing their post!

For the same reason a mod can delete a post - it's part of moderation. Maybe the person misspoke about a rule, the mod can add an edited note to clarify it instead of creating a new post to correct the person. Or a mod can remove a link from a post if the link is to something they don't want in the forum without needing to delete the whole post.

Being a moderator means that you have some degree of trust to behave yourself. If someone did what you're suggesting and abused their power in such a way they would be promptly removed by a full mod or admin.

Got it! Someone did this to me once and I demoted him myself (I was a supermod).

I thought we removed post edits by mods like a year ago. Is that not true?

Nope, I can still do it. It's odd, because I thought the feature was removed as well.

Btw this still isn't fixed. :P

I don't think it's an issue. But I can see issues may arise out of it easily.

I'll put it on the TODO list (once I find it).