Hi,
Canceling the booking itself doesn’t trigger a refund automatically, this depends on the website and/or host terms, so it’s always there just to give the ability to let the host know that the customer will not show up, this also frees the booking dates in the calendar (allowing for another booking to be made).
You can hide this link with additional customizations, but it will only slow down the release of dates for other bookers.
Also, please check this topic Hide Cancel Booking Button on Booking Details Page when Status of Order is Processing