Sharks proliferate in the hosting world as well as the rogue guests too.
As a guest I always choose instant book as I know well in advance what to expect in level of accomodation provided and the cost which is fixed at the time of booking, as I like to know where I stand.
Some hosts have their listings on numerous sites, not just Airbnb. And they don't always update their calenders and prices regulary if they don't have instant booking option.
So, is it allowed to decline booking inquiry or request and change the price? Yes.
Is it fair to prospective guests? No.
Is it allowed to change the price when instant booking is confirmed? No.