@Erin443
That message reads to me like - if you do nothing the request will expire and the reservation would remain. That's what you want if it's within your 5 days of check-in.
Don't reply.
It would make cancellation easy if you agreed to cancel, but you shouldn't do. If you did that, it would not matter about the contract not accommodating Covid and it would cost you your cancellation fee. I see no incentive for you to cancel there, and I wouldn't. If you accepted their cancellation request fearing they would make your life hell, then that's certainly no way to be made to feel, but the Airbnb system does make any sort of reasonable resolve impossible, when the guest is being unreasonable.
If you didn't accept, you will of course then receive calls or messages from CS and the guest trying to pressurise you to cancel since, if you fold - everybody else is let off lightly, you lose your cancellation fees, but Airbnb would retain their service fees - Those Post March 15th contracts do not allow Covid as an excuse to cancel a reservation - remember! That risk needed to factored in by the guest when they booked. Their responsibility.
This part - We’ll refund the service fee. ...Is the service fee YOU would have paid. NOT the Airbnb Service fee the guest would pay. Airbnb would get their service fee okay.