This has been something I have been trying to figure out also since nothing on the proof is updated when the project is cancelled. One of our decision options is "Waive Approval" and I have told my team that they need to select "Waive Approval" for all pending proof reviewers when they cancel a project. It's frustrating because it is a manual process that is often missed and when it is missed, those pending decisions still display on proof approval reports.
As the WF Admin for my team, I do monthly checks to make sure everything is clean and I run a report of all projects that were cancelled during the month and manually verify there are no pending approvals... it is a time-consuming project that I wish I didn't have to do.
I am interested to see if there is anything else people are doing to make this an easier process.
Another thing I'm finding is the tasks stay in the New or In Progress status when a project is cancelled. I wish there was a way for those tasks to be cancelled as well but I haven't been able to find anything that would make that an automated process.