My broker told me that's deceptive practices and I can warn them to remove it before reporting to the state and cause them to lose their license.

I know there's a risk of "losing" one or both if there is too much of a delay, but since Person #1 made the appointment first, is there a best answer to this?  

If you fail to close you will lose your deposit (earnest money).In future make sure that your "C: Buyer has deposited money into escrow account prior to signing agreement (proof of funds) or shortly thereafter.Good Luck And Thanks for your service!!

Even then with hind sight this was not enough time at all.

Complete waste of energy to show unfinished properties and worse, it could cause you to lose someone who may have actually bought the finished product.Perhaps with the demand you have there and the reputation you've built, you have a better opportunity to use that strategy to find renters.

To not make a big deal and lose rapport, i would thank them but tell them anything in the future will be rejected per the lease. 

Which lowered the price of the houses.For me as a buy and hold investor I would never want to invest in an area that I could potentially lose the ability to rent my house out. 

One of my life philosophies is that "Givers Gain and Takers Lose" When you enter a deal as a giver and the other side sees that, they are more inclined to be a giver too.  

If you lose money renting it out you are not making any income. 

There is no homestead exception applied...but I will also lose it in my current house if I rent it, so ...I'd like to go with the worse case scenario.