"Static" test bookings return CF 1234 to help identify that it is not a live reservation. The static test interacts with the system to create an itinerary record where the transaction is recorded, but it DOES NOT interact with the payment processing systems, pull room inventory or create a reservation record in the reservation database.
Since there is no booking to actually cancel in the system an error is returned. You know your cancel request is working when you receive the cancellation email when testing.
You can also run an itinerary request to see the status of the booking later when the static booking itinerary record is changed from a pending status from the error to a cancelled status (removed from sales stats).
You can learn more about cancel errors in these documentation sections.