Edit bet is the facility given by bet365 to make any changes in the bets that have been already placed but are unsettled. For ease, you can add more bets, swap the bets and even delete or remove the selections that you no longer want to bet on.
But it solely depends on your request getting accepted by bet365 because, in case the market or fixture itself gets suspended or odds get changed, then you cannot edit your bet. Editing of the bet will allow you to use the current value of stakes to place a new one. You can do it from the My Bets>Cash Out section next to the Bet Slip itself and bet365 allows it for pre-match and In-play bets both.