@Thomas1415 In the future, don't acquiesce to guests' requests for discounts. Those who ask for discounts are disrespecting you and your listing and that disrespect will usually signal further disrespect and entitlement from them.
Cancel the reservation is what I would do. People like that will likely cause you to lose more money than you earn. Super Host status should not be a consideration, but if you have IB you should be able to cancel without penalty.
@Thomas1415 In the future, don't acquiesce to guests' requests for discounts. Those who ask for discounts are disrespecting you and your listing and that disrespect will usually signal further disrespect and entitlement from them.