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Technically, the two OSM states that are considered closed are "Completed" and "Aborted".
In addition, there are additional states considered Not-Running, which are "Not Started", "Suspended", "Waiting for Revision", "Canceled", "Failed". The failed state is not considered a final state since you can resume the order when the problem is fixed -- but you don't have to!
It really depends on your use case / requirements that you are trying to realize. If for whatever reason the failing order is not to be fixed, technically I do not see a problem of leaving the order state as failed. But naturally, you would want to fix them.
The other aspect you should consider to use is the Fulfillment State in OSM 7.2. Fulfillment State reflects the fulfillment status of the order, while order state reflects the processing state of the order. If you are using orchestration, you should use Fulfillment State to indicate such status, such as failed, of your order items as well as the order.
Product Management -- OSM