If you want to allow users to cancel a booking they have already submitted, you just need to enable the option “Can be cancelled” in the product.
Your users will be able to cancel their booking no later than x days/months since the booking start date, based on the cut-off date that you can set using the “The booking can be cancelled up to” option.
Users can cancel the booking from their reserved area in your website “My Account” page.
The plugin does not handle any other refund option related to booking cancellation.