I am new to Airbnb. My policy is currently set to flexible and I am thinking of changing this to the next level up. In your experience (as a host or as a guest) would this put you off booking?
No, a Moderate policy is still pretty flexible. I mean, what would cause you to cancel less than 7 days before your planned vacation? Anything really stopping you would be covered under Extenuating Circumstances, so you'd be refunded anyway. Anyone not willing to commit to their reservation a week out, may not be the most reliable guest in other ways too.
A moderate policy is a good one. I've used this level for several years, and have experienced few problems with it. When I am traveling, I always make sure There is a decent cancellation policy. I personally am fine with free cancellation up to 5 days prior to the booking, but I would never book a strict policy accommodation. Sometimes things change, and I don't want to be stuck. I think a strict policy is good for hosts, not so much for guests.