If you have an agent, they are quite likely to want the text to be edited before it is sent to the publisher, with many agents doing the editing themselves; you should consider hiring a freelance editor if you do not have an agent at this stage. Developmental editing is generally done before submission to potential publishers.
If the publisher wants your work, they will assign a project editor who will usually be the same person as the commissioning editor who accepted the text. They will be responsible for your manuscript through to when the book is launched, and they should appoint a copy-editor who does the lion's share of the editing of the text. The project editor should then do a second edit, and assign a typesetter to turn the text into a form that can be printed, and traditionally there was a third editing stage, proofreading, that checked that the whole editing process from submitted manuscript to print-ready text had not introduced any errors. Sophisticated automation in typesetting and diminished margins in publishing have led to this being seen as a dispensible step; in academic publishing, which tend to have a rather sloppy copy-editing stage, the proofreading stage is necessary and is typically "delegated" to the author.
There is such a thing as over-editing, just as, per Nick's comment, in music there is such a thing as over-production. It generally happens when editors are not given enough time to get a feel for your style, and so don't respect it when editing.
It's your responsibility to check that you are happy with the edits. Ask to look over the edits in full (this should go without saying, but it doesn't). With Word, this should mean looking at a text with all changes tracked. Go over the edits one-by-one, if you can make the time. Ask to have any edits explained that you are unsure about. Discuss things until you are both happy with it, if there is time. This is time-consuming, especially if either you or the editor are inexperienced.
If your publisher takes responsibility for ensuring that your manuscript's editors have the right resources, you should be grateful to have such editorial attention. It is quite likely that no-one who reads your work will do so with as much close attention as your editors: they are among your best readers. In my experience, most writers do appreciate their editors.