Is there a way to set the product's stock status automatically to "In Stock" after a credit memo has been created and quantity is restored?
Or would it somehow be possible to set that setting automatically to all products that has qty > 0?
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I found an extension that fixes this issue. Seems to work also with 1.9.x editions when tested.
When you create the credit memo there is a field that allows the user to specify whether the item should be returned to stock:
In the case where more than one product was ordered it provides an input field that allows the admin to input the # of items from the credit memo that will be returned to stock.