Question:

Will WHMCS generate an Invoice if server/product Cancellation request in place?

Answer:

if a product has a cancellation request it will not be invoiced for that billing cycle

If a cancellation request has been submitted for the end of the billing cycle, that means that no NEW invoices will be generated. If an invoice was generated BEFORE the cancellation request, that invoice will remain active until the next due date. At that time the invoice will be automatically cancelled because a cancellation request exists.