Does H1B get cancelled if applied for L2 visa?

Well, you can't really be an H1b and an L2 at the same time. You'd have to be one or the other. If you want to continue to work for your current employer then you should retain the H1b. If your husband is going to be in the US after your H1b expires, you can always change status to L2 through USCIS before your visa expires.