Airbnb says if we feel uncomfortable with a guest we can cancel a booking.
Why would someone who is shy ask to meet for coffee in advance of staying with someone. This is definitely a red flag - I can understand why you wanted to cancel.
Did this guest have a photo on his profile and a completed profile? Did they have previous reviews? Did they tell you why they chose your place and plans for their stay? Did they have verified ID. These are always things I check off before I have anyone stay in my home. If you have Instant Book turned on, I would remove this, so you review guests, if necessary asking for additional information, before deciding if there is a good fit.
It is unbelievable that Airbnb asked you to make an excuse to the guest, this was a ludicrous suggestion as it has now put you in an even more difficult situation.
Why on earth would this guest change his travel arrangement so he can stay with you, it all sounds so strange.
I always ask Airbnb to put any advice in writing and confirm any actions they are taking or asking me to talk. Did they do this for you?
I would call them back and explain that their advice has put you in an even more difficult position as now the guest is saying he will change his travel plans so he can stay with you. They need to reach out to him and sort this out.
In your situation, I would tell him through the Airbnb messaging system that you are not comfortable with him staying with you and that it would be better if he found another host to stay with. Confirm that you number was only shared with him for business reasons associated with his booking accommodation through Airbnb and that he shouldn't be using it to contact you or saving it for personal use.