Urban Dictionary defines canceling as "to dismiss something or somebody" and "to reject an individual or idea." And when people use the term unironically, it reveals a big problem with our culture. Cancel culture as it currently exists doesn't give people a chance to learn from or apologize for their wrongdoings.
Answer: There is nothing in the story to support the idea that Gregor is imagining or hallucinating his transformation and much that makes it clear that Gregor's transformation is to be accepted as an actual event. The third-person point of view certainly does make this evident.