I would never have chosen instant booking BUT FOR Airbnb's auto message when I tried to remove it "you will lose penalty free cancellations!" Oh no, that sounds like something that I don't want to lose. But I never had it actually. "penalty free" is a defined term that you don't see the definition for until after the fact.
The high-handed part is the way the app forces you to choose something you wouldn't choose BUT FOR a misleading promise. Then it imposes a penalty - more than one actually and offers no recourse. My guest was totally understanding and not put out at all.
Anyway, just a pointer for a fantastic site and I've had fantastic experiences but this seemed to me to be out of step with my previous experiences and taking a turn that is tempting when an organization gets some clout and power. I understand the concerns for guests but leaving a sour taste in hosts' mouths isn't the answer. Airbnb is so big and busy that it can't deal with individual situations now probably - sort of like minimum penalties that apply once a fact situation is established - lots of unfairness results. If hosts are upset the the best approach is to acknowledge it, examine it and address it.