For WooCommerce 4.0 and older, restocking on refund has two possible ways of being handled:
- A refund of the order where the order status is changed to “Refunded” triggeres a restock of all items in the order.
- A partial refund of the order gives the admin the option to restock or not with a tick box:

As of WooCommerce 4.1 the option for a full order refund can now also be managed through a filter. Woo 4.1 introduces the new filter “woocommerce_can_restock_refunded_items”. If set to false, this filter will prevent restocking of items on refund.

For details of the change see issue #25728 on github. And to find out what else is happening in Woo 4.1 see the Beta Release Note.
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