@Kristin108
This is nothing new. This separate cancellation policy for South Korean guests has been in place for years.
When the guest requests to book, you should get a pop up like the screenshot you posted above, explaining the policy and also that you can choose to decline the booking 'without penalty'. In reality, there is a penalty, as it will still lower your acceptance rate, so it's no different to declining any booking request. The difference is that you are alerted to it first, so you don't have to accept it. I wouldn't. It's too risky.
If it was an instant booking, I don't know how it works. I would hope that you should be able to cancel penalty free if you are not happy with the cancellation policy, but perhaps someone else knows about that...
