Enabling overstrike means to replace the existing characters with a new characters as you type in a cell. The idea of doing this is to select one character when a key is pressed and also ignoring the backspace key.
This can be achieved by using the TextBox.SelectionLength property of the GridTextBoxCellRenderer in the CurrentCellKeyPress event. The Backspace key can optionally be translated to the Left Arrow key in the CurrentCellKeyDown event when you want the Backspace to move to the left without deleting characters.
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