Your listing looks lovely, it makes 100% sense to me the guest has mentioned issues with “bed comfort and smells”..— photos reflect a very clean, modern and well designed space, guest is complaining about items you can’t “see”.
Yes, you are correct to be concerned, Best to move the guest out as soon as possible, with least amount of conflict..
Were you able to speak to a live person, or connect with someone via airbnb chat to review the rules? There is a formula used to calculate your payout, and the guest refund, if the guest cancels now, based upon nights stayed/ reservation and your cancellation policy and air long term stay policy.
There are a number of airbnb guru’s on this platform…hopefully, they will chime in as well.
Something similar happened to us…bad bed complaint, guest unsuccessfully attempted to get 50% refund.
I do think you should also touch base with a lawyer, for future, especially if you continue to offer long term rentals, to give you peace of mind…
cash4keys.=when you pay a tenant, usually 5-10K to leave a property. Give them cash, they give you the keys.