For all who are following, Airbnb contacted me that the owner decided not to cancel the booking anymore (at the wee hours of almost 48 hours later, the dateline for the owner to respond). Yes, even with a screenshot of the chat history that the host clearly asked for a cancellation! And since I already booked another Airbnb in the meantime, I can't keep this apartment anymore. Airbnb said if I were to cancel now, I will be charged cancellation fees since the cancellation is initiated from me at this point onwards and not the host.
After some back and forth with Airbnb, Airbnb acknowledged the problem and inconvenience on my side and would honor my booking a full refund and compensated me with a voucher.
So lesson learned, if a host requested to cancel your bookings, ASK FOR AN IMMEDIATE CONFIRMATION and not let the owner having his sweet time to 'think about it' and come back 48 hours later only to change his mind again. You might have very well found another Airbnb in 2 days.
Given how ridiculous the whole situation is, I want to make people coming to Malta to be aware of all listings from this profile:
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