With instant book you can cancel if guests don't meet your house rules and I think you can also have a few cancellations for free.
However you can also cancel on normal bookings if guests don't meet rules such as no children, no pets or want to bring more guests than your accommodation allows for. You can also cancel if a guest makes you feel uncomfortable such as threatening you.
Of course with normal bookings you can chat to your guests before accepting a booking so there is much less chance a guest won't meet your requirements particularly if you have comprehensive house rules and descriptions.
I think BNB is being a bit disengious as they want hosts to use instant book.