No they shouldn't cancel because every state colleges has reserved seats for home state candidates.

Hello

NEET MDS 2019 Counselling is conducted by Directorate General of Health Sciences (DGHS) on behalf of Medical Counselling Committee. The counselling is conducted for admission of candidates to 50 percent All India QUota seats and 100 percent seats in Deemed and Central Universities.

Counselling for state quota seats will be done by the counselling authorities of state.

Check the detailed information about the counselling and do let us know if y ou have any other doubt.

https://medicine.careers360.com/articles/neet-mds-counselling

Good Luck!

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