@Scott241 - the guest is eligible for a refund based on your refund policy which is Moderate.
https://www.airbnb.com/home/cancellation_policies#moderate
If the guest arrives and decides to leave early, 50% of the accommodation fees for the nights not spent 24 hours after the cancellation occurs are refunded.
Airbnb will handle the refund based on this policy.
If you choose to give a larger refund, you need to do this through the Resolution Center and it will come out of your earnings.
Please note there are exceptions to this policy. The guest needs to apply for an exception and Airbnb will determine if they meet the criteria. You can certainly send the guest the information about how to cancel, how to apply for an exception if they might need it, and your cancellation policy. The rest is up to them and Airbnb.