When Mix_FadeInChannel is called Mix_Channel.fade_volume is set to the current volume and Mix_Channel.volume is set to 0.  If Mix_FadeOutChannel is called prior to Mix_FadeInChannel finishing it sets Mix_Channel.fade_volume to the current volume rather than the desired volume for that channel.  When Mix_FadeOutChannel is finished it uses that fade_volume attribute to reset the volume on the channel.

The following program reproduces the problem.

#include <stdio.h>
#include <unistd.h>
#include <SDL/SDL_mixer.h>

bool done = false;

void channelFinished(int channel) {
    done = true;
}

int main() {
    Mix_OpenAudio(48000, MIX_DEFAULT_FORMAT, 2, 512);
    Mix_ChannelFinished(channelFinished);
    Mix_AllocateChannels(50);
    Mix_Volume(-1,MIX_MAX_VOLUME);

    Mix_Chunk *chunk = Mix_LoadWAV("/tmp/foo.wav");

    printf("volume start: %i\n",Mix_Volume(1,-1));

    Mix_FadeInChannel(1,chunk,-1,5000);
    sleep(1);
    Mix_FadeOutChannel(1,500);

    while(!done) {
        usleep(10);
    }

    printf("volume end:   %i\n",Mix_Volume(1,-1));
}