Credit Memo is incorrectly returning item to stock. Result: wrong inventory level

Credit memos created for exchanges have never inflated our inventory levels before now. We realized after processing an exchange, that the credit memo returned an inventory item to stock, yet the RMA was not yet received.

This is our current exchange process:

Create RMA from Cash Sale- use credit version of RMA.

Add new item to Sales order, switch Sales Order form to Invoice form.

Receive item against RMA.

Fulfill Sales Order, Mark Shipped, Bill, which creates the new Invoice.

Press Refund of the RMA, which turns the RMA into a Credit Memo, which applies it against the newly created open Invoice. After shipping payment is accepted/applied, Invoice is paid in full.