The sales order status represents that overall status of an entire sale. The sales order status does not have a direct effect on stock levels. In particular, moving a sales order to the Completed status does not update stock levels (since stock levels are updated by packing and shipping sale shipments).
The sales order starts with the Editable status which equivalent to draft status. In this status all fields on the sales order are editable.
From the Editable status, the sales order can be moved to the Committed status. This is not required (a sales order can have shipments created and shipped or be deleted or by marked completed even while still in the Editable status) but is useful to track which orders are still in the process of being created vs which orders represents firm commitments to customers. Items on sales orders in the Committed status are treated as reserved and affect the remaining after reservation and available to promise quantities for the location selected as the sales order origin.
When a sale is finished the sales order can be moved to the Completed status. As mentioned above, this does not affect the quantity on hand in any way. Moving a sales order to the Completed status removes reservations for any items on the sales order were never shipped. Sales order in the Completed status do not appear by default on the screen listing all sales orders, but changing the filter on that screen to include Completed will show them.
A sale can also be deleted using Cancel order menu item on the actions menu of the sales order detail screen. This changes the sales order to the Canceled status. As a side effect, it also updates all shipments for the order and moves them to the Canceled status as well (which means any modifications to stock levels from those shipments are voided). An order in the Canceled state can be moved back to the Editable status, but any canceled shipments remain canceled and have to be recreated.