Cancel order increases stock although "Set Items' Status to be In Stock When Order is Cancelled" is set to No

[denzyk]

We've recently run into issue where stock quantity is restored (increased back by 1) after the order has been canceled although Set Items' Status to be In Stock When Order is Cancelled is set to No.

Preconditions

1. Magento 2.2.6 Community
2. Reproduced on PHP 7.1.18 and 7.1.25
3. MariaDB 10.1.26 and 10.3.11
4. Go to Stores -> Configuration -> Catalog -> Inventory and make sure the following options are set as per below:

• Decrease Stock When Order is Placed to Yes
• Set Items' Status to be In Stock When Order is Cancelled to No
• Manage Stock to Yes
• Automatically Return Credit Memo Item to Stock to No
  (see screenshot below)
  

Steps to reproduce

1. Place an order with 1 item of product (i.e. qty = 1)
2. Cancel order

Expected result

1. Product quantity in product catalog is decreased by 1 after order is created
2. Product quantity remains the same (i.e. does not increase) after order is canceled

Actual result

1. Product quantity in product catalog is decreased by 1 after order is created
2. Product quantity is increased by 1 immediately after order is canceled

[magento-engcom-team]

Hi @denzyk. Thank you for your report.
To help us process this issue please make sure that you provided the following information:

• Summary of the issue
• Information on your environment
• Steps to reproduce
• Expected and actual results

Please make sure that the issue is reproducible on the vanilla Magento instance following Steps to reproduce. To deploy vanilla Magento instance on our environment, please, add a comment to the issue:

@magento-engcom-team give me $VERSION instance

where $VERSION is version tags (starting from 2.2.0+) or develop branches (for example: 2.3-develop).
For more details, please, review the Magento Contributor Assistant documentation.

@denzyk do you confirm that you was able to reproduce the issue on vanilla Magento instance following steps to reproduce?

• yes
• no

[magento-engcom-team]

Hi @engcom-backlog-nazar. Thank you for working on this issue.
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[denzyk]

@magento-engcom-team give me 2.2.6 instance

[magento-engcom-team]

Hi @denzyk. Thank you for your request. I'm working on Magento 2.2.6 instance for you

[magento-engcom-team]

@engcom-backlog-nazar Thank you for verifying the issue. Based on the provided information internal tickets MAGETWO-97493, MAGETWO-97494 were created