You did right, some people just want to best place at the cheapest place possible , those one would make your life hell during their stay. Also how were they planning to pay? cash or by direct bank transfer to you? that would mean using airbnb platform without paying for it, you wouln't be protected by airbnb in case anything happens. Have no remorse to have decline that guest, you could also report him to airbnb.
in case this happens, maybe instead of saying you dont approuve the behavour, maybe just say it's not possible as it is against airbnb policy, if the guest accept to pay (because he just tried) its all good, if he insits, decline and report.