Wow...what an interesting response you received from the rep. I have asked that question at least 5 times (over several years)....just to compare rep. responses. And every single rep. told me that if a guest uses a stolen credit card, Air will pay out as long as the fraud is discovered after you receive the payout. But, if the fraud is discovered before the payout, then host doesn't get paid anything.
Hopefully your payout will come fast if the guest is using a stolen card last minute. And the real cardholder doesn't report anything first. Air doesn't verify the cardholder is the person booking. Anyone can use anyone's card.
I am not following the whole 24 hour thing about not being able to cancel. Do peopel on instant book have to wait 24 hrs. before the system will allow it? And what is consdiered "uncomfortable?"