By design, canceled course sections are removed from both the Student Courses tab and the Instructor Courses tab.
This means that canceled course sections will not display on the Student record in SS&E under any status dropdown!
To clarify:
A "canceled" course section status imports from the SIS on the Course Section data feed. More information about the SIS Import Definitions can be found here.
Canceled course sections do not display in SS&E, no matter what the "transcript course" i.e. "student enrollment" status displays in the Transcript Course data feed view.
Course Section Status takes precedence over Transcript Course transcriptCourseStatusId.