Does a bank has control over "authorization releases" and they can cancel it anytime, so the third party should not process refund since it is just an "Charge- authorized"

Yes, a bank typically has control over authorization releases for credit or debit card transactions. When a merchant requests authorization for a transaction, the bank places a hold on the funds in the customer's account. This hold indicates that the merchant has the right to charge that amount. However, if a transaction is authorized but not yet settled (the actual transfer of funds), the bank can cancel the authorization at any time, usually if the merchant does not process the transaction within a certain time frame (often several days). As a result, the funds that were on hold can be released back to the customer’s account. In terms of refunds, the situation can be a bit more complex. If a merchant processes a refund after authorization but before settlement, that refund usually must go through the same process as any other transaction, meaning it requires its own authorization and should be initiated by the merchant. Cancelling an authorization does not inherently mean the merchant should refrain from processing a refund; they may still choose to refund the customer for the transaction that was originally authorized. It is always important to communicate with the bank and the merchant in these situations to ensure that all processes are followed correctly.