3.6. Deleting Vs Cancelling an Existing Event
To mark an appointment as a cancellation is a different process than just deleting the event. You also cannot hit the "cancel" button - this just exits the event edit window, it doesn't actually save any changes.
If you have opted to have your cancellations marked as such, you will have 1 or 2 additional categories in your diary, dependent on which option you have selected.
To mark an appointment as a cancellation, you need to edit the event to change the category to an appropriate cancellation category, rather than deleting the event. This leaves a copy of the appointment in diary at the original time, but you and the team know to book over this slot.