When a student drops or withdraws from a course that uses Canvas, they will display as inactive in the People page but will not display in Grades.
The student will still be associated with the Canvas site. This is because students who withdraw from a course still have an academic record within Canvas that must be preserved.
NOTE: Withdrawing from a course is not the same as dropping a course. See the guidelines below for what to do for your campus:
Canvas campus and vendor resources