One general rule of operation is that as hosts we should NEVER do anything we don't need to do, including cancel, change, any reservation, etc. If the guest needs to cancel/change a reservation, ask him/her to do it. The guest's side has those options as well. Some guests might not be very familiar with the system so we can tell them there's such an option and ask them to go look for it or contact the CS for help.
Cancellations from host side or guest side have completely different results. Basically Airbnb wants to charge a "penalty" so the penalty will be on whichever side that initiated the cancellation. If guest initiated the cancellation then Airbnb will not refund the service fee. If host did, then Airbnb put penalty on host.