Originally posted by Mharr:

It shouldn't be possible to remove a paid game from your library, it's probably just hidden.

Technically it is possible to permanently delete a game from your Steam library. Though it involves going through account settings, answering a few "are you sure?" prompts, and it will be as if you never bought the game. The only way to get the ge back after this process is to repurchase it. (Edit: There is no refund in this process, it just removes the game from your account. Refunds are a different process subject to Steam's terms and conditions)

O' course if Steam is saying he still owns it.. yeah he probably just hid it :)

Start to type Valheim in the search box above your game list in the top left of Steam, it will show even hidden games in the results..