It sounds like there is a plugin interfering with the CtrlU undo option. To find it, open the console with Ctrl` and enter the command
sublime.log_commands(True)
This shows what's going on behind the scenes when you press key combinations or use mouse buttons. Test it by making some multiple selections with CtrlD, and you should see
command: find_under_expand
in the console. Now, try to undo one of your selections by hitting CtrlU and see what comes up. If you see
command: soft_undo
then it's not another plugin issue, as that's what you'd expect to see. However, if (as I suspect) another plugin is interfering, you'll see something else there. If you do, hopefully you'll be able to trace it to the plugin it belongs to and disable it.
When you're done, enter
sublime.log_commands(False)
in the console to turn logging off, then close the console by hitting Esc or Ctrl`.