@Melody22 Simply agreeing to a cancellation doesn't incur penalties for the host. The guest asks you in a message if you'll offer a full refund if they cancel, you say yes, no harm to either party. But if the host gets an Airbnb generated message asking them to approve or decline the cancellation, that is registered as a host cancellation. I know this doesn't make sense, but that is, in fact, what happens. The host is fined $50-$100, if they have Superhost status they will lose it and not be eligible for it again for a year, they will have "Host cancelled this reservation" put up on their review page, which makes guests wary of booking with them. So of course no savvy host will ever accept one of these cancellation messages.
Airbnb is really shafting hosts right now by not honoring their cancellation policies and to add insult to injury, encouraging guests to initiate these cancellation "approval" requests, without any understanding on the part of the guest that this will be devastating for hosts if they accept.
And you shouldn't have called the host to "work it out", although there was no need for him to be rude. That's another thing you seem to be in the dark about as a host yourself- all communication between guests and hosts should be kept to the messaging platform, especially so for anything contentious, so there is a record of the conversation.
I respect you for choosing to refund your own guests 100%, I have done so as well, but that doesn't mean other hosts are obligated to do the same. We all have to live with our own conscience.