I can't see any advantage for a host to have a flexible policy unless they have the type and location of listing that means they are pretty much always assured of getting last minute bookings to fill the space, or they just don't care much because Airbnb is basically a small sideline for them.
I wouldn't want to clean and prepare the place for a guest only to have them cancel last-minute.
I've always used moderate. If I were a guest, I wouldn't want to book a place with a Strict policy myself and as a host I wouldn't want to have to deal with guests raging about having to pay 50% for a booking they cancelled well in advance.
I don't think most guests, unless they are seasoned Airbnbers, or quite thorough people who read everything, really pay much attention to the cancellation policy, and even if they do, they often find it confusing, as evidenced by many guest posts here on the forum who are enraged that they don't get a full refund for a booking they cancelled.
@Michael2496