As you know, an inquiry differs from a reservation request in some important ways. This is how I understand it...
Inquiry: If a guest inquires, answer quickly to maintain a good responsse rate, but you do not need to pre-approve or decline at this point. If you pre-approve and then have second thoughts, you can withdraw the pre-approval without penalty. However, if you pre-approve and the guest accepts by confirming a reservation with you, cancellation policies will apply if you cancel.
Reservation Request: If a guest submits a reservation request, answer quickly to maintain a good response rate, and either approve or decline their request within 24 hours. If you accept a reservation and later decide to cancel, cancellation policies will apply.
To withdraw a pre-approval, just click on the appropriate box that appears at the top of the message thread. This can only be done if the guest has not yet accepted your offer.