Why would an order get cancelled?
If an order which has been sent to Shopify is canceled on the marketplace, the corresponding order in Shopify is also canceled.
What happens to inventory levels?
Inventory levels remain unaffected. The cancellation does not restock the product. This behaviour is deliberate. Consider the possible reasons for cancellation, for example, unable to fulfill due to damaged or missing stock.
We don't get the reason from the marketplace, only that it was canceled. If Shopify Marketplace was to restock the product, that risks overselling an item that is unavailable.
If an order is canceled due to a customer reason, manually adjust the inventory to put the product back into stock.
For further assistance, please reach out to marketplace-connect@shopify.com