Hi @Jesse-Burton0 this is probably the best suggestion I've seen in this Community! While I haven't had but one alteration request (an extension, not shortening of a stay) I've seen situations where the original reservation was for weeks then a guest makes an alteration request shortening the stay to several days. In the meantime the host's calendar has been blocked for the original reservation. I've often wondered if this was a way to circumvent cancellation costs. Hosts should be compensated for shortened reservations in my view.
Please note, however, if you accept an alteration, your cancellation policy doesn't go into effect. Essentially you won't be compensated for the day that was eliminated. You only get the benefit of your cancellation policy if the guest actually cancels, not alters, the reservation even though that is what they are effectively doing. That's why you need to consider carefully whether or not to accept the alteration.
Most hosts do accept, however, to be nice and accommodating, but you are not required to do so.
As to your question about what would have happened if you didn't accept the alteration and they didn't check in on the original date, you would be compensated for all the nights they originally booked (assuming they didn't cancel) even though they checked in a day later.
Please send your suggestion to Airbnb as this Community is not staffed by their employees.. 😞