"There is not enough free space in the Undo buffer to store the entire action."

Déjà Vu X3 limits the number of actions it will save in the undo buffer (so that they won't take up all the available memory in your computer). What that message means is that the buffer is already holding as many actions as it can, and cannot hold any more unless it deleted existing ones.

In effect, it means that you won't be able to undo all the replacements performed by the Search & Replace dialog. if you don't expect to need to undo the replacements, you can safely ignore this message.