You cancel it on PO's behalf as the team is already behind

Cancelling any Scrum event is not recommended and doing so on the behalf of one person (PO) is certainly a bad idea. This can set a precedent in the team that the events are not of value and that can be a major blocker to any real change being adopted by the team. Let's look at an example of where a Scrum Master cancelled a retrospective on behalf of the Product Owner.

Jak was a new Scrum Master and he had just taken on a new team that had been trying to work in Scrum for a while. after observing for the first sprint he saw that the retro was cancelled. Asking why he found out that the Product Owner couldn't make it and it was best to cancel. As he was observing he let it go, however, the next sprint it happened again and he was asked by the PO to cancel. Initially questioning why the Product Owner stated they were too busy and the team needed to focus on delivering. Jak knew it wasn't the right thing but decided building a relationship with the Product owner was important so cancelled the retrospective.

During the next sprint, the team struggled with the same problems as the previous sprint. This was something Jak had hoped to bring up at the retrospective. During this sprint, he spent time with the team to understand their view of cancelling the retrospective, but he found that this happened all the time and the team had lost some confidence that he would support them or change anything as all the drive is on delivery and not on any improvements.

It then took Jak 4 sprints to get the team on board with the retrospectives and see Jak as an enabler for the team rather than the Product Owners deputy. This was a major learning point for Jak in his journey as a Scrum Master and the potential impact of cancelling Scrum events, specifically the retrospective