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Amazon MWS: Issue with OrderAdjustment Feed, Partial Cancellation

To partially cancel the orders on amazon, I am using OrderAdjustmentFeed, as mentioned here

https://images-na.ssl-images-amazon.com/images/G/02/rainier/help/XML_Documentation_Intl. V158772716 .pdf

My XML feed looks something like this

<?xml version="1.0" encoding="UTF-8"?>
<AmazonEnvelope>
    <Header>
        <DocumentVersion>1.01</DocumentVersion>
        <MerchantIdentifier>******##******</MerchantIdentifier>
    </Header>
    <MessageType>OrderAdjustment</MessageType>
    <Message>
        <MessageID>1</MessageID>
        <OrderAdjustment>
            <AmazonOrderID>*****************</AmazonOrderID>
            <AdjustedItem>
                <AmazonOrderItemCode>*********</AmazonOrderItemCode>
                <AdjustmentReason>NoInventory</AdjustmentReason>
                <ItemPriceAdjustments>
                    <Component>
                        <Type>Principal</Type>
                        <Amount currency="INR">0.05</Amount>
                    </Component>
                    <Component>
                        <Type>Tax</Type>
                        <Amount currency="INR">0.00</Amount>
                    </Component>
                </ItemPriceAdjustments>
                <QuantityCancelled>1</QuantityCancelled>
            </AdjustedItem>
        </OrderAdjustment>
    </Message>
</AmazonEnvelope>

The feed works, and it updates the refund amount for the mentioned item, in the seller panel.

But, the problem is that the status of the item doesn't change from "unshipped" to "cancelled".

And if I use OrderAcknowledgement feed, then as expected, it cancels all the items in the order, which is confirmed by change in status.

Can anybody help me out in understanding why the status in seller panel doesn't change to "cancelled" even when the refund gets initiated?

PS: I am using sandbox account to do the testing.

Page 46 in the link you mentioned in your question there is an example for XML feed which has this line to define the amazon xml Schema:

<AmazonEnvelope xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" xsi:noNamespaceSchemaLocation="amznenvelope.xsd">

and in your XML feed you are not defining the schema in tag, and this might be the reason(According to my personal experience).

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