@Laura2592
So.... if I understand correctly, your friend (host) is losing her home and is therefore planning to cancel future bookings in order to move into the listing herself? Hmmmm...... I can sort of see how this might NOT be seen as an extenuating circumstance. While I understand the part about losing her home, plus challenges to finding an appropriate temporary place to stay and having nowhere else to go, in the end, fact is that your friend wants to cancel future bookings so she can use the place herself. If the listing was being sold, it would totally be an EC but in this case..... kind of a grey area imo.
Has your friend tried contacting the 4 guests? To explain the situation and ask them if they'd agree to a mutual cancellation? As long as the guests do not experience any financial loss (including fees) I don't see why they wouldn't be sympathetic to your friends situation and agree to the cancellation - this may mean (worst case scenario) your friend might have to be willing to cover the cost of the guest service fee if the guests are not able to get the service fee back from Airbnb but I think it's worth looking into.
As a guest, if my booking got cancelled with no prior explanation from the host why.... I'd be pretty upset. Finding an Airbnb that suits my needs (price/location/amenities) is usually way more work than booking a hotel - so having to find an alternate place to stay would be a significant inconvenience. Knowing the situation, hearing from the host would help the guest understand, and if it were me of course I'd understand, be sympathetic, and agree to cancel, but I'd still feel like I wasted my time and I would not be looking forward to having to start the search to find a place to stay AGAIN.