It might be useful if canceling a deletion flag was recorded in the Flag History, with at least an optional explanation. It's confusing to see Status: Active when the flagger's reason appears to have been valid, but there's nowhere (unless I'm missing something) to see why the flag was canceled. You can't even see who canceled it to ask them privately. Of course if the deletion is carried out, you can see both the deleter and their stated reason.
If this would take a huge amount of work, I admit it's probably not worth doing.
Updated by TonyCoon