Repro Steps

1. Login as a teacher.
2. Create an assignment that accepts file submissions (and nothing else).
3. Login as a student.
4. Go the dashboard page of the system.
5. Go to the "Timeline" block (and if is not present, add it).
6. Notice that the mentioned assignment is present in the "Timeline" block.
7. Submit a file in the mentioned assignment activity.
8. Click on the "Remove submission" button
9. Notice how expectedly the "Files submission" info is gone.
10. (1) Notice how the submission status is still "Submitted for grading".
11. Go the dashboard page of the system.
12. Go to the "Timeline" block.
13. (2) Notice that the mentioned assignment is NOT present in the "Timeline" block.
14. Login as a teacher.
15. Go tot the grading table of the mentioned assignment activity.
16. Go to the row of the student who removed the submission.
17. (3) Notice how the status of the submission is still "Submitted for grading".

Actual Results
The student submission status is "Submitted for grading" althought "currently" there is no actual submission of the student.
Also, since the submission is not available anymore in the "Timeline" block, the student does not even has a reminder that a submission is needed for the relevant assignment.

Expected Results
After removing a submission, the student submission status should be "No submission".
As a byproduct, the assignment would be available in the "Timeline" block.

Problem
Students are able to remove their submission, but users (student and teachers alike) still seeing the status of "Submitted for grading".
This is very confusing, in my opinion. Although factually something was indeed "Submitted for grading" in the past, the recent state is more like "No submission".

From the student point of view - There isn't indication in the "Timeline" block that a submission should be made, is very problematic. And even if the student actually enters the assignment, he may only notice the "Submitted for grading" text that is highlighted in green, and miss the fact that there isn't actually any file uploaded.

From the teacher point of view - The same point, but in a larger scale. The "Grading summary" info would be distorted and of course the data in grading table .
What's more even more problematic is that some teachers would give a passing mark based on the sole fact that a file was uploaded. In that case, if they count on the submission status in the assignment grading table, and miss the fact that there is no file uploaded, they may give a passing mark to a student that officially didn't submit anything.

By the way, I know that some people might say that bigger issue was always present, and there is no system that can handle it technically - Unless the teacher uses the "Require students to click the submit button" setting in the assignment settings, after the student submits a file for the first time, the relevant assignment is gone from the "Timeline" block of the student and the teacher might see in the grading table a submission that is possibly not the latest version of the the submission that the student intended to upload. However, in the past (when a submission couldn't be removed completely and the student could only swap files), at least something was submitted. Something is better than nothing. And in that aspect, the issue was less severe.

Even not demonstrated in the "Repro Steps" section, this issue also happens when the teacher remove a submission for the student.

Related Issues
Please see already fixed MDL-35963 ("Possible to submit an empty file picker to Assigment and have it count as submission"), which is not the same issue, but a kind of a mirror version of it - The ability to submit an empty submission caused more or less the same result.

Please also see MDL-64919 ("Remove submission as admin not working"), and specifically the comment of Isabel and Daymon from the end of May 2019. It seems they talk around the same issue.