Still allowing incoming orders even when it is not set to 'continue selling when out of stock'

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Hi is anyone else having this issue?

We have a product set to track inventory. And if it goes to 0 - theoretically should not allow customers still place an order for this. 

And we made sure not to select 'continue selling when out of stock' but it still let 3 orders go through even tho the inventory was 0 (it should say sold out instead and not allow customers to order).

Anyone else having this issue or know how to resolve this so it won't keep having the inventory go negative and then we have to refund the customer!

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