Order fulfillmet not cancelling sale order when stock is not available

We have a scenario where user wants the fulfillment to cancel the order if stock is not available for the order item lines.

It works for partial fulfillment - i.e when i have an order for 80 EA, only 40 EA is available, auto fulfillment allocates 40 EA and the split line will have unallocated 40 EA, then when i release the batches using R4277703, it cancels the partial line without stock.

But this cancellation is not happening when there is zero stock for all the items in that order.