I created a Cancellation Notice. The content is basically a modified copy of the Customer Order Notification email.
I set it up to send to the customer, with a BCC to our email address.
I checked off for it to automatically generate when order status is changed to canceled.
Screen shot of these settings:

I also went back under Order Statuses and added the cancellation email to that change of status, but this did not make any difference to the testing before or after I did so.
I selected one of my test orders and changed it's status to Canceled.
NO email was generated for either address, mine or the test customer address.
Once canceled, I could not manually send ANY email through the system for that order. Trying to change the status back to pending, etc., did not make any difference.
I could go to a different order that was active and manually send the cancellation email to that email.
Each time I did so manually on the un-canceled order, the customer email address received not 1 but 2 copies of the cancellation notice. I think this occurs because it's adding the email from the order screen in addition to adding the email in the email form using the keyword "customer"? I have no idea how to fix it that particular side issue.
The basic confirmation email when an order is placed works fine, as does the automated one that kicks out when the order is marked as shipped in the shipping section.
Changing the order status using the Task dropdown menu in the Order Summary seems to the be problem? It's not generating the emails.
Anyone able to help? Thanks