Currently, the instructor guide of Canvas states:

For the calculation of the Late Penalty, days late will be rounded up to the next whole number. For example, if a student submits 1.3 days late, the Late Penalty will treat the student as 2 days late. This behavior also applies for hour durations.

Nevertheless, in my experiment, the late penalty is not actually rounded up if the deduction is by number of hours. Is this a bug?