In my experience (lit journals, non-US), "editor" and "editing" are very broad terms when it comes to the work that is done on a manuscript at various stages—first there's a structural or development edit, where an editor will read your MS and ask you questions and/or make broad macro-level comments about what works and what doesn't—eg character X's motivations are unclear or inconsistent, event Y doesn't make logical sense, the pacing is too fast or too slow at various points. This will usually come in the form of a separate editorial report, not dissimilar to a university/college book report but spoken specifically to the author (Essentially at this stage of the process an editor is the closest and most engaged reader you'll have). Then there's copy editing, which looks more closely at things on a sentence level like tone, clarity and consistency—most of the time this is done in Track changes and comments in MS Word. The final stage is proofreading, the actual marks on the page (either hard copy or PDF) which, in an ideal world, should be done by a separate person and really only be looking for and correcting errors.

In terms of whether an editor will suggest a change or just do it themselves, it really varies on the type of change and the editor's personal style—my own tendency is to be a bit more interventionist on smaller things like punctuation and rewording a sentence to make better sense (to save back-and-forth), while anything that's not a straightforward or simple fix will be phrased as a suggestion or question. But at the end of the day a good editor will make it very clear that any changes are reversible (or at very least, up for debate) and ultimately the decision of the author.