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Cancelling an EBAY transation Problem
 

So I sold a $150 figurine, buyer left positive feedback, and then messaged and asked if I wanted to cancel the transaction to get my fees back, which is strange because nobody else has ever done that, but I agreed and he cancelled and I kept the money and he kept his item, now he says there's a problem with the item and he wants to return, if I disagree, there's nothing he can do since he cancelled right?

I'm pretty sure he can still dispute the transaction with Paypal

Although the sale was cancelled on eBay the funds will still show as received in your PayPal account. So they will still be able to dispute it through PayPal depending on when the sale took place.