The order was cancelled on Etsy, but Shopify would not cancel the matching Shopify order because it has a fulfillment Shopify will not let it cancel: one that already shipped, or one that has not shipped yet.
Why it happens
Shopify does not cancel an order while it has an outstanding fulfillment. Shuttle cancels a fulfillment for you if it has not shipped and is at one of your own locations. You see this error when that was not possible:
The order shipped, in full or in part. Shuttle never removes a shipped fulfillment. Instead, it tries to mark the order as refunded in Shopify to match the Etsy refund. No money moves and nothing is restocked. If "Mark all orders as fulfilled" is on under Settings > Orders, every order counts as shipped, even one that never left.
Another app or fulfillment service handles the fulfillment. Shuttle leaves it alone.
Shopify did not let Shuttle cancel it. The fulfillment had not shipped and was at your own location, but your shop has not given Shuttle permission to cancel it.
How to fix it
Open the order in Shopify.
If it shipped and still shows as paid, refund it in Shopify without restocking anything that shipped.
If part of the order has not shipped, do not send that part. If the transfer reduced your Shopify stock for items that never shipped, add them back.
If another app handles the fulfillment, cancel the fulfillment in that app. Then cancel the order in Shopify.
If Shuttle did not have permission, cancel the fulfillment and then the order in Shopify yourself.
Still seeing it?
If none of these causes fits, or the order is still open after these steps, contact Shuttle support. Include the Etsy and Shopify order numbers.