A withdrawn student in SM is still part of the group, their participation and resource use has come to an end, but you want to keep a record of the module and the group they were in, because they have a mark or attendance footprint which you would like to keep.
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Just like having a withdrawn status on the qualification does not remove the student from the system, it doesn't for the module.

​Adding an removing the Withdrawn module status
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Removing the withdrawn Module

To remove them completely, you should remove the withdrawn status and reverse the module registration, that will remove any record of them.
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To reverse the module registration, please see article: Reversing or Removing Qualifications and Registrations
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Ensuring attendance not captured for withdrawn students

The other option is to change the date the students left the group (manually) to the date withdrawn and it will set them as not available for the events in the timetable, so they appear but can't be selected (if accidental errors are your concern).
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