I think you understand the first part (lose your lease) perfectly well. This could happen because neighbors in your building don’t like it. It could be because your landlord or your city start using one of the services designed to find listings that are in violation of laws or leases. See this thread for more information.
It’s probably the second thing, blackmail, that you needed clarification on. If you read the threads here you might run across a post about a host who had a group of people come in and stay all week and then at the end they complained about the place and threatened to report her to the city, the police and the IRS. And, of course, complain with airbnb. She hosts in a city where there are many illegal Airbnbs but she is not one of them. I think they picked the wrong person to mess with. Almost all of the problems people report here are where they have rented out their whole place and they are not living on site. Places get trashed, things get stolen, neighbors complain, prostitutes use airbnb, people smoke on the balcony even if there is a no smoking on the property rule, people stay several days and then complain about something and get a full refund… There are a lot of things that can go wrong and it pays to be well informed about these things.
Could you please cite your source for this information? It’s probably “everybody I know does it.” That isn’t going to help you if you get in trouble. Airbnb doesn’t enforce leases and makes very little effort to help hosts comply with laws. It would be impossible. Also if you have trouble with a landlord or the city they won’t be of any help.
Most of the hosts who post here do so legally and we aren’t sympathetic with hosts who are violating laws or leases. But we’re also mostly nice people who want to be helpful.
We’ve had someone post here who hosted illegally, made a lot of money and got lots of great reviews but was caught and is now looking for another place and she will start Airbnb again.