@Linda108
Yes, it makes sense to set it to strict for very busy periods and moderate otherwise.
The problem is that it really varies how far in advance guests book. Some book months in advance, others weeks and some only days, so how do you allow for that? As far as I'm aware, you can't set one policy for specific dates and another for other dates, which might be a useful feature if it was available.
I really don't mind giving a full refund if guests cancel well in advance, but most of my cancellations have been right before the 5 day cut off, with not enough time for me to book those dates (even though I know they would have gotten booked with a bit more notice).
As for using strict, and then offering an additional refund, yes that's possible, but when I did this for a guest who cancelled nearly two months in advance, I noticed that Airbnb took the money from my next payout, not her payout, so I was out of pocket for two months.