Unpaid subscriptions are still active subscriptions, they just indicate that the card payment failed during the renewal. Where as cancelled subscriptions are either those cancelled by the customer himself or could also be those which got automatically cancelled after the specified number of retries.
After all retries, you can send notification and mark subscription as either Unpaid or Cancelled by clicking on the gear icon present at the top right corner of the screen, choosing Retry Settings, customizing it and clicking on Save.
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See Also
How to Delete Expired iPhone Subscriptions: Easy OptionsA subscription notice appears when I open a Microsoft 365 applicationDoes deleting a Microsoft account delete all data associated with that account from Microsoft servers? - Microsoft Q&AHow to Cancel a Deceased Person's Subscriptions the Easy Way - Trustworthy: The Family Operating System®