@Jackie101 Airbnb still consider it an extenuating circumstance if the guest is currently infected with Covid-19, which means they can get a full refund regardless of your cancellation policy (that "non-refundable option" is a joke - Airbnb has never practiced it). Assuming that the person who tested positive was a member of the group, you don't really have any rights here once the guest decides to call Airbnb and get their refund.
You might be able to prevent this from happening by offering a date change.