Hi I believe I read somewhere on one of the airbnb releases in years gone past, maybe just around pandemic, that they have an algorithmn that flags party risk bookings. I think it was a combination of age under 25, very few bookings, large group booking ie over a certain number of people and local. Don't quote me on the specifics but i was something like that. And caused by the huge amount of party disruption cases that arose during the pandemic.
I had the same case pop up and airbnb will not let the booking go through. It's there to protect you and airbnb from any issues. But I just asked the guest who reached out to find someone else in their booking not local to book, and there was no issues. Similar to what you did. I did ask for a little more detail on the booking just to comfortable which they provided. And i made sure they knew it wasn't a party house.
I think you will find guests will notify you (the ones you want!), highly unlikely you aren't finding out because they go to all that trouble to evaluate and try to book before they get flagged. So i don't think you are missing out on business. Honestly, the guests that are legitimate will want to stay, they'll find a way and prove to you that they will be kind to the property. It kicks out those who are not legitimate.
I find airbnb protects me more over VRBO for these reasons given large properties tend to attract the parties. So personally, I appreciate what this algo does for me!
Hope this helps!
Regs
Mary