Yes the pencil is the edit. When you get into the edit screen you will see Publish Draft and Discard Draft options. If you make changes they will not take place until you publish. When you choose to publish you will be presented w/ the option to save a copy of the original.
If you want to preserve the original for existing projects you can make a copy of the workflow, edit the copy and save it for use w/ another project. The Copy function is available under the system admin issues screen where you will find all workflows listed.
if a workflow is not used by any project it is considered "Inactive" and can be deleted. Inactive workflows can be found under the system admin area, issues, workflows at the bottom of the page.
If you edit an Active workflow and publish it will change the workflow for all projects that use it.
Any workflow is available to be used w/in a project. When you create a new workflow it remains in the Inactive list until it is associated to an issue type within any project. At that point it becomes active.
I suggest you read this. Note that is for Cloud version so if you are on Server version you may wish to locate the specific documentation for that.
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