Personally, we have always had the cancellation set to strict, Im in business to make money and if you had you calendar blocked for a couple months the chances of you getting another booking are pretty slim to nothing. especially if it's last minute.
As for cancelling half way through their stay they have no chance, They want to leave early thats their problem, not mine.
They will try it on,
Fortunately we have not had many cancellations,
One I remember some years ago tried to cancel on the day of arrival, was not on airbnb another platform, he made a song and dance I dont know what he said to paypal but they withheld my money for 2 weeks, but I didn't give in and eventually got paid.