When you say "someone reserved the space" - do you mean they had a confirmed reservation? Or they sent through a reservation request that you declined?
Any time you cancel a *confirmed* reservation, you're backing out on what's essentially a contractual obligation. Airbnb & your would-be guests don't look on that favorably & there are a number of associated penalties - one of which is blocking your calendar for the dates you cancelled.
If it was a reservation *request* that you declined, that's a different story. When doing the decline Airbnb suggests "would you like to block these dates", assuming you are declining because your calendar wasn't up to date. I'm not sure the process always works smoothly on mobile. If this is the case, you can get in touch with customer service to open your calendar for those dates.
Keep your calendar up to date - set minimum stay requirements for festivals or holidays (and price accordingly!). I wouldn't put too much faith in the new pricing mechanism quite yet. The prices seem all over the board and Airbnb has a vested interest in increasing the volume of bookings, not necessarily what is best for you as a host. In my area the suggested prices are about a third of what I can actually charge.