> I assume then that the editor would only be used for editing css, not html

It does edit html. Inserting html elements in this case.

> I'm also curious how they determine where in source the code needs to change

Right now we're editing inline-tailwind because it's the easiest option. It only edits the existing tailwind styles so there could be some interaction with existing styles that have higher-priotity.

The plan later is to have users configure how they want their styles written. We have full code access to be able to edit css stylesheets or inject our own.