I spent quite a long time changing things in my project with it not working before I worked out how you're supposed to use it, which is:

1. Add: if (live_call()) return live_result; to the first line of any code block that I want to be editable

2. Press ctrl-s to save the project

3. Bring the live server cmd window into focus and press any key in it. 

If I don't do step 3, it doesn't seem to detect that a change has been made. 

Is there any way this can be added to the cheat sheet? 

The server window never waits for input (save for displaying error messages before closing) so you shouldn’t have to do anything.

Do note, however, that GMS1 IDE can take longer than usual to update files on disk, which is something GMEdit can help with.