Is this a bug? It sounds like a bug to me......I tried a different scenario.
1. Create a product with 2 variants.
2. Modify the quantity in stock for the first variant to 5 or something greater than 1
3. Modify the quantity in stock for the second variant to 0
When I see that product under it's category, it says "Out Of Stock".
I'm going to log a support ticket and will update this.
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