undelete (-W) with rm (BSD General Commands) - Operation not supported
From man rm:
 -W    Attempt to undelete the named files.  Currently, this option can only be 
       used to recover files covered by whiteouts.

So it can't be used to recover files deleted by the usual means.
For a (rather short) explanation of whiteout see https://askubuntu.com/questions/39826/what-does-whiteout-mean-in-a-copy-on-write-filesystem. A slightly better explanation I found on discussions.apple.com:

A whiteout node is used are part of a union file system mount, where a 2nd file system is mounted over a base file system, and the files in both file systems appear to be merged.
When you delete a file in the union file system which happens to be in the bottom layer (which is effectively read-only), the top layer gets a whiteout node created to indicate that the bottom layer file should not be returned on a directory lookup.
So while I did not find anything about deleting a whiteout node, my theory is that maybe if you create a real file or directory with the exact same name as the whiteout node you created, the file system will automatically remove the whiteout node. Or try renaming a file to the same name as the whiteout node.