Thanks for this clarification. The text of the email you were sent was confusing and understandably upsetting after all your efforts. As you probably know by now, any refund would be dependent on your cancellation policy, so as others have said, consider if you want to adjust things. But definitely I believe you should ensure that this matter is not recorded as a cancellation by host, because that will be an injustice to you and may have some adverse effects.
Because bedding is such a critical aspect of the accommodation, perhaps you might begin your description with a mention such as 1 Double bed and two single beds to accommodate a maximum of 4 persons.
If as a new member you have to work with "Instant Booking", then put a mention in to firm up the responsibility of the guest to check the details in your description/details.
eg. "Please ensure that you understand the terms of the "xyz" cancellation policy is xyz-and the facilities that are available at my listing." "If you are unsure or have any further questions please feel free to send me an email, and I will attempt to give you the information which you need."
There is an opportunity for a pre-booking message with instant book and this is also an opportunity to remind the guests not to rush the decision, but double check the details before going ahead.
I have been using these types of phrases more frequently now when communicating with potential guests and maybe it has caused some to refrain from booking, but I prefer a tiny moment of disappointment to the more complicated upset if an unsuitable booking proceeds, only to be withdrawn and fixed up later. So I hope that the support and suggestions from other hosts will be helpful to you.
Be cautious about sharing things like passes and parking permits if they have limited transfer rights. You don't want to upset your fellow residents. Just be upfront about the visitor parking situation and provide sound parking information/advice in your itinerary.
Encourage guests to read and print their itinerary, so thay have it when traveling and while at the listing. It has all your contact details, directions, house rules and other essential information.
Happy Hosting, soon you will have a fresh and fabulous guest, so write back and tell us what a great time you had.
Regards, christine.