i have instant booking, so think I can cancel guest request without penalty, but guest has indicated they will be coming back to house very late after going to concert. I prefer not, so can I cancel without penalty? Thanks
IB is totally separate from your cancellation policy (which you will have set as either flexibile, moderate or strict).
What you are talking about is extenuating circumstances for declining a booking make by IB. In my opinion a guest arriving back late after an event would not be covered and you would be penalised for cancelling their booking.
If I understand instant booking, and I may well not, you can have up to three times a year where you cancel because a guest makes you uncomfortable. I guess in this case you are uncomfortable hosting a guest that is coming in late after a concert? I think you would probably be able to do that without penalty, if you mean that a reviewed, verified guest used instant booking so you did not "accept" or "decline" them.
Also, I believe when guests instant book they have to confirm they agree to your house rules. So, you can add to your rules (like the stuff whether you accept kids, pets, etc) something about "no entry to house after xpm" or if that is not the thing that concerns you, something like "courtesy hours from 11pm-6am" if you are concerned about the noise maybe?
If this is not in your rules, I say you accept this booking, deal with it and then reflect in the rules that people have to be in the house at a certain time. (They don't want a late check in, but just want to return late, right?) I have found that when I explain that I go to bed early, most people go out of their way to be quiet when they return late at night. As a guest, I would find a curfew to be unacceptable and would probably not book with that person, even if I was not planning to be out late.