Hi @drdantru
What Canvas does, is it removes the lowest score in the Assignment Group, from the student's total for that assignment group and from the student's total score for the course or grading period. It also adjusts the Assignment Group's and the course total's total possible point for just that student so that their percentages are accurately calculated. It does not in any way change the student's score for the assignment that was dropped, and this is a good thing - we don't want a gradebook to look like the student didn't submit even their lowest scored assignment.
You can learn more in this guide, How do I create rules for an assignment group?
I hope this helps,
Kelley
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