@Vanessa576 in this situation I would tell her this:
Hosts are not in charge of how refunds happen.
All matters of money are handled by Airbnb, so if the guest wants a refund, they have to send a request to Airbnb. Airbnb will make sure that the appropriate cancellation policies are applied.
In this instance, of course, the guest should not be entitled to a refund of the last night of their stay.
But it is Airbnb's job to tell her that.
It is, of course, possible that Airbnb will send a request to you asking if you approve an unusual refund (against standard cancellation policy). You do not have to approve this request.
If the guest comes back to you asking why you did not approve the request, you can tell them that to be fair you always follow the standard cancellation policies.
If you have tough time saying no to people, use the line that "We have investors that we need to ask to approve any refunds that go against the standard policy. They didn't approve. Sorry."