What is happening when I hit "escape"?

What’s this thing that’s popping up with I hit escape? (see picture)

Shouldn’t hitting escape again make it go away instead of inserting the 1st selected word/character?

A quick search led me to here: New QuickType-like feature found in OS X Yosemite

It looks like a system-level ‘feature’.

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Yes, it’s the system level “complete” list. Generally when you hit escape (again, after the list is showing) it will not insert any text. It seems there’s a bug in the case where you start by hitting escape when there’s no current word… then it will insert “I” and a second escape seems to leave the I in place.

The feature is normally used to complete long words that you are already in the process of typing.

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Thanks! (i guess i’ve never run into it very much before…but I’m hitting the esc in Taskpaper more often than usual while I’m getting used to it.)