The Cancel button can be used to cancel the current edit and to restore the cell contents to the previous state. If a user decides in the middle of an edit that the data being entered into a cell is not what they want, the user can push this cancel button to cancel the current data and return the cell to the state it was at before.
The most common use of this button is when overwriting the contents of a cell with new data. If the user decided to revert the change before confirming it, the cancel button is the answer. Note that this button works just like typing the escape key on the keyboard.