Reproduction steps:

1. Open "MinimalReproProject.zip"
2. Open the "Main" Scene
3. Drag and Drop "Prefab A" from the Project window onto the child("Prefab B") of "Prefab A" in the Hierarchy window
4. Repeat dropping the "Prefab A" on the Last child ("Prefab B") 2 times
5. Click on the Second "Prefab A" and Click "Apply" in the Inspector window
6. Repeat dropping the "Prefab A" on the Last child ("Prefab B") 1 time
7. Click on the last "Prefab A" and Click "Apply" in the Inspector window
8. Click on the first child "Prefab A" and Click "Apply" in the Inspector window
9. Press "Ctrl" + "Z" ("Cmd" for Mac) repeatedly until the Editor freezes/crashes

Expected Result: The Undo function should Undo the actions
Actual Result: Editor freezes/crashes, sometimes just creates more prefabs outside of the main prefab with the child objects

Reproduced with: 2017.2.0b3, 2017.1.0p1, 5.6.2p4, 5.5.4p2

Note:
Notice how after step 5 the prefab in the Project window didn't update with the newly added child objects
Notice how after step 5 and step 7, upon clicking the "Apply" button, the prefab closes and when expanded there is one more "Prefab A" added