Edited order status always 'Canceled'

v. 2.1.0.2

All order status's seem to work fine, except when an order is edited (ie. you remove or add a product), the order status defaults to "Canceled" and will not change no matter what you try to change it too.

1. We have no payment gateway. The site is setup to accept orders without payment (internal site).
2. Default order status in settings is, "Pending". It's also "Pending" on cash on delivery and "Pending" on free delivery.
3. We do not have an anti-fraud module setup (again, it's an internal site).

All orders seem to work fine, except there are two orders set to Canceled and these are orders that were edited.

Any idea?