If you receive a refund, ideally you don't want those transactions to count in your spending or income. In order to ensure the refund transaction is not counting towards spending or income, set both transactions to the same category.
For example, if you purchase a $5 shirt and then returned it, you would want to make sure both the $5 out and $5 in are set to the 'Shopping' category. Rocket Money will then net the two together and they will 0 out for purposes of your expense and budget tracking.