> Exactly how does moderator/editor edit a message prior to allowing it to be
> posted to a moderated list?

You just edit it and forward it to the list address. As documented, if
your mail client doesn't use Resent headers, the message will appear to be
from the editor, rather than the original sender.

If you use this method, you need to use this in the list header:
Send= Editor

If you prefer to use the OK mechanism, then you use:
Send= Editor,Hold