Fulfillment Management is not cancelling lines that cannot be fulfilled...I have the Service Level C

Scenario:

We have a customer
that will not take backorders nor incomplete lines, but they will accept
whatever lines we can fully ship.  For
example, we have a 10 line order, 8 lines can be fully allocated, 1 line can only
be partially allocated and 1 line has no available inventory at all.  We would like fulfillment to allocate and
release the 8 lines, and cancel the 2 remaining lines. 

Our setup:

We are running fulfillment management.  The customer’s service level rules are setup as
follows:

1. Order Minimum Fill Percentage (ORMNFLPR) = 0%
2. Line Minimum Fill Percentage (LNMNFLPR) = 100%
3. Service Level Cancel (SLCANCEL) = Y
4. Service Level Partial Commit (SLPRTCOM) = N