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It appears cancelled bids are not removed from Bid History and if they win they show as the winning bidder in My Account > Sold list. The emails sent to winners etc is correct, but a user checking who won their auction will see the wrong user ID against the sold list - if they click on view the item the correct winning ID will be displayed on the view item screen.
Example
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User one Bids $8\
User two bids $10\
Seller cancels User twos Bid\
Auction finishes and User one is sent winner email\
Seller checks my Account Sold List which shows User two as winner. \
Seller Checks bid history User Two shows as highest\
Seller Clicks on link to view item and user one shows as winner.
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