Hi there! I own 3 furnished rentals/STRs in downtown Mystic, CT, and have been running Airbnbs there for the last 3 years. Unfortunately, this kind of thing happens with short-term rentals, especially when you are new to hosting and trying to be nice. The customer always thinks they're right and they're used to dealing with customer service reps from large corporations like Amazon etc. and don't always understand the perspective of the host as an actual person.
If I were you, I would log into your Airbnb account and re-review your cancelation policy. Airbnb has several options to choose from (Flexible, Moderate, Firm, Strict and Super Strict). I would never allow a guest to cancel mid-stay unless they have a very very good reason. Even at that, if you have left all your contact information in the house for them, I would advise a phone call immediately so that you can personalize the situation and get a better understanding from them as to why they need to cancel. For example, I created an information book in Canva that has all the house details and my personal contact information.
You were accommodating and polite. If you do receive a bad review - I would 1. Reply to it stating brief facts (don't get petty other people will see it). Guests review you based on 3 categories, cleanliness, house rules, and communication. If you're rating falls short due to communication, your reply can be specifically about that. If you need to go to Airbnb perhaps they can assist you with removing it etc.
Hang in there, there are also wonderful perks to being a host! I have had people leave me Christmas ornaments and lovely notes in my guest book. Keep at it and try not to let one bad experience ruin it for you!
