@Heather133 I would just ask the guest to initiate a new booking request, so things don't get get tangled in the wash. Once you have been paid out for the original cancelled booking and the new booking, you can reimburse the guest whatever excess you've received.
Yes, the guest has to trust you to do that, and may balk, but they should play nicely since they're causing you some hassle and time spent on this, due to their waffling about. The last thing you want is to be out money on a stay, or have a further mess on your hands = more time spent.