@Gordon54
Hi Gordon. Sorry to hear about your problem. I'm afraid this is going to be your fault in the eyes of Airbnb. Syncing calendars if down to you, and I presume would only fail if your didn't get the code right. I know it took me several attempts to get Airbnb, OD and others to join up.
You could try to make things right by finding another host who will take the one-night guests, I've heard others doing that on this forum. That way you wouldn't necessarily need to cancel.
If you are going to cancel, I'm not entirely sure I agree with business is business. I think I'd feel I should honour the first booking, even though it's less profitable.
Hope you manage to resolve this.
Ben
PS Best not to use all caps - usually reserved for shouting!