Insufficient Merchant Account Balance

When a refund occurs, Stripe will first try to recover the funds from either the Connected account’s Stripe balance or their linked bank account.

If this fails (because there are not sufficient funds in either), Stripe will take the funds from the platform account.

So ultimately, it is the platform that is responsible for ensuring customers are made whole. Please note that this applies to Stripe Express accounts (which are typically those used with this plugin and recommended for most marketplaces), but not standard Stripe accounts.

You can read more about this at the link below:

https://support.stripe.com/questions/reserves-for-connect-platforms-and-connected-accounts