Incorrect Contribution status "Pending Refund"

Hi

Testing on Drupal7 / Civi 4.7)

If event participitation selection is changed (selected that has less fees that the original selection) and partial payment is already made the payment status changes automatically to "Pending refund" even though there is still balance due on that participant.

For example:

If participant is registered to event by admin in backend and event has 3 selections:

1. 1st  - $1500.00

2. 2nd - $1200.00

At first '1st' selection was made and partial payment of $500.00 was made, then event participation summary is viewed, it shows correct status. Screenshot: http://prntscr.com/gsfokn

Now when selection is changed to '2nd' still contact owes $700 but system says the payment status to be "Pending refund". Screenshot: http://prntscr.com/gsfpgg  

I have replicated the issue on http://dmaster.demo.civicrm.org/ for this contact: http://dmaster.demo.civicrm.org/civicrm/contact/view?reset=1&cid=205

Also i noticed once the status is pending refund, no matter how many times admin adds payments, it no longer gets added in paid amount.

Please ask me if you need more detail on the issue or need more screenshots.

Thanks