Answer: The History palette isn't that sophisticated. I think of the History palette as simply taking snapshots of what your document and layers palette looks like (similar to taking photos of yourself while getting a hair cut) and it simply allows you to get back to what your document used to look like in the past (just like showing someone what you looked like before someone messed up on your hair cut, but in this case you'd actually be able to undo those bad cuts. But it would not allow you to undo one cut and keep all the subsequent ones since you don't have a shot to go back to that looks that way). That's it. The Allow Non-Linear History option just makes it so that the palette does not delete steps if you move back a few steps and then make a change to your image. I know what you want to do, but the history palette simple isn't designed to do that type of stuff.