@Ross634 I interpreted that policy somewhat differently. It's true that you as the host are responsible for cancelling a booking if the extenuating circumstance would make it impossible for you to fulfill the booking even if the guests managed to arrive safely. For example, if a storm flooded your home or knocked out the utilities, the onus would be on you to initiate the cancellation. However, my understanding is that you don't have to be the one to cancel when conditions such as road closures or bad weather prevent the guest from reaching the destination. Basically, everything outside the boundaries of your property is outside of your jurisdiction, so you're not required to get involved with it (even though, of course, providing relevant safety advice is just plain good hospitality).
What should have happened is that when you called Airbnb to explain the situation, an agent who's well versed in the policy listened carefully to you, explained the options available to the guests (cancel or request a date change), and steered you away from any actions that would have resulted in penalties.
Unfortunately, they don't seem to have this kind of quality customer service anymore. Getting a confused outsourced agent or nascent AI involved only makes matters worse, so it's usually best to do whatever it takes to avoid contacting CX.