According to Come-From-Beyond in the emails send to DCI:
The Coordinator is used as an extra protection measure. Particularly, it stores all transactions that reach it, this allows us to recover iotas sent to addresses with typo (we detect it because users usually publish the addresses on the tangle before usage).
If a transaction is sent to an address and then a user sends a transaction with a typo, how will the foundation determine that it is a typo and not a legitimate spend?
What are the criterias for 'typos' with the IOTA Foundation? Are there addresses that users can send IOTAs to that can never be recovered from (ex. burner addresses)?
How is the transaction reversed and how are other users and exchanges compensated for any downstream changes to their balances as a result?