Dynamic modes at supersonic speed
At 353.9 m/s:
 your phugoid mode is unstable as well as degenerated (Poles lie on real axis and has damping ratio 1). 
while at 235.9 m/s:
phugoid mode has become stable as well as oscillatory and has some damping and frequency.

so, nothing has been canceled its just phugoid mode poles changing positions.
you can check it clearly by plotting root locus using rlocus command on MATLAB.