I came here to see how I can fix this issue because it is incredibly confusing to have an unfulfilled order sitting in my notifications. An unfulfilled order that I canceled and have no intention or means of ever fulfilling.
What do I find? People have been asking for a resolution to this issue for OVER THREE YEARS, and Shopify has no solutions. A thread of 72 merchants asking for a resolution? Nothing. Questions about this specific issue littered all over the discussion boards? No solution.
Please resolve this Shopify, it's ridiculous, and frankly insulting, that you haven't already.
I think I found a workaround. I had an order that was refunded and was showing up unfulfilled. The only way I was able to mark the order fulfilled is as follows:
After completing the above 3 steps my order changed from Unfulfilled to Fulfilled. Hope that helps!