@Peta115
If it’s an enquiry you don’t have to formally decline. Just answer and if the question was stupid or something doesn’t feel right you can add something like, “I’m sorry but honestly I don’t think my listing would be satisfactory for you and I cannot offer you a booking.”
If it’s a Request to Book you do have to accept or decline unless you can persuade them to withdraw the request by politely letting them know that they will be unwelcome.
Perhaps, “I am sorry that we cannot accommodate your request at this time. We do appreciate your interest, but you should withdraw your request immediately in order to avoid being charged a booking fee.”
I know this is misleading, but it is technically true, in an obscure way. If you did approve their request, and they demonstrated the intent to violate the rules and had to cancel later, they might incur fees and/or penalties.