@Kimberly781 I'm sorry this happened to you, but I don't quite understand- you gave the guest the options to remove the dog from the property or leave, but in fact he continued to stay with the dog and you did not enforce him leaving? Why give the guest options if you aren't going to follow through on making him leave? Empty threats are pretty pointless.
And why was there still dog hair on the cushions when the next guests checked in? Why wasn't a thorough cleaning done?
As for the review, I'm surprised it would affect your bookings, as you have so many glowing reviews, and that review is already far down the page. And your response to that review makes things pretty clear. I'd be more concerned about the more recent review that says the smell of mold was overpowering and the place wasn't clean. I assumed this was another bad guest making things up, but I see you left her a great review.