I think you're misreading what "Invitee" means.
They define:
“Invitee” means a person invited to be present at a Covered Accommodation by a Responsible Guest.
“Responsible Guest” means the Guest who booked your Covered Accommodation for the period during which you incurred the Covered Losses.
So a "Responsible guest" books my place for 4-people. The other 3 are "Invitees" and still covered under Airbnb insurance. Now it's true that I know nothing about those 3 people and they literally could be "anyone", but that's not the same as "a guest can bring an unlimited number of "Invitees" without permission".
YOU set the max occupancy for your listing and fee structure for extra guests. YOU set your house rules for who is allowed in your property.
There is one loophole, which is unregistered guests/visitors. You close that loophole by having a house rule "No unregistered guests on the property".
See this section of TOS:
8.1.3 If you book a Host Service on behalf of additional guests, you are required to ensure that every additional guest meets any requirements set by the Host, and is made aware of and agrees to these Terms and any terms and conditions, rules and restrictions set by the Host.
So specify in your house rules that only registered guests are allowed on the property and that you require all guest names. With this you should have everything you need to cancel an entitled crazy person who thinks they can bring 8 people when they booked four.