If the PDF doesn't contain form completion elements you have to use the "painting / diagramming mode" to add annotations. However, I often find the "form enabled" PDFs to have horribly mis-aligned boxes with odd choices for fonts and inconsistent behavior (check marks or choices for example).

I do agree that the annotation feature isn't like Omnigraffle or draw.io diagramming apps that are based around a mouse; the interface does seem more suitable for a touch (pad, screen). You choose an object to add, then get to move it into place rather than selecting an object to add and then use the mouse to place and size it. The annotation feature also works in a very similar way on an iPad / iPhone.

If you tap (click) and /hold/ anywhere in the hit zone of an object the cursor will move to a hand and you can move it anywhere. For a text box, the hit zone it is almost anywhere on the text - yup, it is more awkward if you delete all the text! The resize / reshape hit zones for objects are centered around the "dots" when the object is active. A single tap (click) will edit text.

I am not sure what is happening when things disappear and cmd-Z doesn't undo, I've not experienced that.

This markup feature is also available when annotating image attachments in email.

It would be nice to be able to group more than a single set of objects and keep them grouped.

I've used the annotation feature quite a lot to highlight errors in web pages and give sequence instructions on how to do something on a poorly designed site.