Hi @Dawn322 I hope you are well.
Yes, if hosts cancel a guest then there is a financial and other penalties.
Instant book is the default setting when you create an account, and there are hosts who don't realise this and then see confirmed bookings coming in.
Good that you have changed your settings to "request to book" if this is better for you.
In terms of solving the issue of this cancelled guest- you could get in touch with Airbnb and explain you're a new host and you didn't realise how the system works, and see if they will manage the cancellation for you without penalty.
Best wishes
Paul 🙂