When you have quantities set on variations, the quantities are not being enforced.
For example, we have a test product with 3 variations. Each variation has 1 piece of inventory, but it still allows me to order the same variation even though I've ordered it a few times and should have no stock left.
We've set the Store Settings to not show items out of stock, but that is only when all variations are sold out that that happens. It won't hide individual variations.