@Graham39
Yes you probably are missing something Graham. The cancellation policy of Airbnb has evolved over the years since they have been in operation. It's not a matter of 'bullying' as you say! Hosts were dumping confirmed guest reservations to take a more lucrative offer! Airbnb had to make it un-attractive for a host to cancel a guest reservation, and that is just what they have done.
If a hosting cannot take place there are extenuating circumstances that will be offered to the host. All you have to do is contact Airbnb and ask!
This case of yours is completely open and shut. The guest did not read your listing description and when it was realised that she made a mistake she expected you to carry the can for that mistake so she could have all her money returned......Graham, really!!
Graham you do not take a car out on the road without being aware of the rules of the road....Hosting is not just about making a buck or two on the side out of your spare room! It is a business and it is up to you to know what you are doing.....not blame everyone else when something that you should have known how to prevent, happens!
I am sorry but posts like this annoy me when someone blindly charges into a situation, finds they are in trouble and proceeds to blame everyone else.
Graham, here is a link to the help section you should have read before you started hosting. I suggest you keep it handy on your computer and if there is something you are unsure of look it up instead of accusing others of 'Bullying'!!
https://www.airbnb.ca/help/article/990/i-m-a-host--what-penalties-apply-if-i-need-to-cancel-a-reserv...
Cheers.......Rob