yEd does not support text transformations (aside from HTML formatting) at all.
"Tools" -> "Geometric Transformation" transforms the arrangement of the elements in your diagram, not the elements themselves.
If you need fancy stuff like upside-down text, create an image or a vector graphics document that displays your text upside-down and import the image/vector graphic as a node style in yEd. See How can I use my own node symbols in yEd? for details.