The PeakD system works by storing a 'notify' message in custom_json onchain that creates an 'account' for the notifications onchain. When you approve the use of notifications, it just writes a custom json that announces to the chain that you are subscribing to notifications. If you have already previously pre-approved posting key operations on desktop then you won't be asked to approve in keychain as you already agreed that in advance.
You can't undo the approval because the one-time message was already written onchain.
The only way I know to test this bug is to try to login with an account that hasn't used peakd notifications before - which I did earlier and saw the issue is resolved.