Yeah, as others have said, this is a misunderstanding of British television in general and Fawlty Towers in particular.
There were actually two series of six episodes, the first in 1975, the second three or four years later. A series of six episodes is by no means uncommon in UK television. Neither series was cancelled, and I've never seen any evidence that Cleese and Booth had any intentions to do any more. Even if I did, it would be in the face of overwhelming evidence to the contrary from multiple sources.
Knowing when to call it a day can be tricky, but television culture in the UK makes it easier than it appears to be in the US. Meadow citing The Office is a perfect example again. It said everything it wanted to, wrapped up the story with the Christmas Specials and packed up. Hanging around for the sake of it, with no fresh ideas other than 'got to keep running', tends not to lend itself to good comedy. In the same vein, I believe Only Fools and Horses should have ended with Del, Rodney and Albert walking into the sunset, having won all that cash.