@Robyn95
That is odd...
I have had Instant Book settings "magically" be turned on but not changes made to the cancellation policy without myself or a Co Host doing it. I will say that some have mentioned changes made without their knowledge, only to discover a Co Host actually did make a change (on purpose or inadvertently) and the Owner didn't know about it. I see you do have a Co Host?
You can check the Activity Log for changes to the listing (not all changes appear, but many do).
Go to
Listing Editor
Co Hosts
Tap the Photo of the Co Host (or Owner)
Scroll down to Activity Log
You can even narrow it down to the date that Airbnb said the change was made in the log:

Do let us know if you are able to see the change to the cancellation policy in the log. I'm curious if that is recorded in the Activity Log.