@Sam240 Something similar has happened to me before: a day before the scheduled check-in, I got an email from the guest's girlfriend to say that they couldn't make it because he was hospitalized after an accident. I presumed that she couldn't access his account to cancel the booking, so I copied the email into my customer service ticket with Airbnb and asked that they process it as a neutral cancellation (no penalty to either party). That way, the guest's payment method was refunded (maybe minus Airbnb fees - not sure about those) and my calendar dates were opened up.
Two things were different back then: 1) Airbnb had competent, in-house customer service rather than an awkwardly outsourced mess, and 2) the Extenuating Circumstances clause superseded hosts' cancellation policies in medical emergencies, which is no longer the case for bookings made after January of this year.
But look, the booking was made under the Flexible policy, it's very clear that Bill's son is making a good-faith effort to cancel the booking on his father's behalf despite having graver concerns at hand. He explicitly said to let him know if he needs to do anything, so I think that ethically obliges you to answer him honestly. If the son can access his dad's account, you need only advise him that in order for the booking to get the refund it's eligible for, he needs to complete the cancellation process. If he can't, call customer service and pray that you get an agent who's capable of comprehending the situation and knows that the correct solution is to process it as a cancellation-by-guest (be very sure they understand that you are not the party that is canceling).
The sooner you get this out of the way, the greater your odds are of reducing the losses with a last-minute replacement booking.