After integrating MDL-65956 (and probably before, see MDL-64919 as well). Remove submission item deletes the submission done by the student. But the subsmission status is not reverted to the real status there.

There's a bunch of possibilities here:

1. Changing status if the issue is not graded.
2. Explaining the teacher why the status is not changing. It can be explained on the confirmation dialog. Something like: "The status of the submission won't change because...".
3. Notify student his submission has been removed.
4. Change text from remove submission to clear submission. Since it does delete all the text, files and everything but for me, if the submission is removed the student should see they have not submitted anything (because anything is what they have there.

See this comment on MDL-65956.

This should be tested on all supported versions.

• Create a course and an assignment.
• Enrol some students and one teacher.
• As student and submit something.
• Check teacher has mod/assign:editothersubmission capability.
• Try to remove students submissions and check the status is not changing.