(1) Turns out there was a bug in our system where a guest was actually allowed to double-book this host's listing, so this was our fault. The host did not cancel, we double-booked. We are fixing this bug now, and I haven't heard of any other guests being affected by this.
(2) I just want to note this is a statistically rare event (though by reading comments some of you have experienced this), which is why we probably haven't spent enough time trying to solve this, but we should.
(3) I agree with the author that our cancelation policy is not adequately balanced on both sides of the transaction. Our team has actually been developing a better system for some time, and we should have a more balance policy soon - unfortunate this happened though. Right now, when a host cancels a booking, there is an automated review left on their listing saying this happened, a penalization in their search rankings, and if they chronically cancel, they are removed from our platform; but I agree we could do more here. The changes we are making will hopefully lower the frequency of these instances occurring going forward. Open to feedback here, and if a host has canceled on you I would love to get your feedback on how we handled it.
(4) In the event that a host does cancel, I think we can do more to provide protection and peace of mind to the guest for their trip. We have a Guarantee for hosts, so we are looking at what an equivalent version would be for guests. If you have any ideas, please let me know.