Both guests and hosts can cancel Booking.com reservations on Booking.com and it will sync automatically with Guesty.
As a best practice, we advise asking the guest to cancel the reservation. A guest can easily cancel a Booking.com reservation using a link from their confirmation email or via their Booking.com account.
To cancel a reservation as a host, you must initiate a cancellation request through the Booking.com extranet. Once the guest receives and accepts the cancellation request, the reservation will be canceled. See more information here.