Hi @Vincent-and-Martina-0
The way I see it, one essentially chooses between being flexible in total, or not. If you can be flexible, then flexible cancellation, but also flexible to receive last-minute bookings if someone cancels.
If you have a cancellation five days before someone arrives (like in this case) and your situation is such that you can't accommodate someone else in their place, perhaps that is better matched with a stricter policy.
I do understand why you are annoyed at these guests - they seem to have no consideration for the host's position.