Does anyone have their flexibility set to strict? Will that hurt business?

No. Most people are pretty sure of their dates by the time they confirm and pay. It's better to have your correct policy than to be irritated. Plus, once they've booked, they've agreed to it, so there's no room for them to haggle.

I am set to strict. It hasn't hurt my business. If/when (repeat only) customers come back a day early, which has happened, they don't ask for a refund. I have given a Great repeat customer a break once but it's because she travels so much and I have her pup. My customers know that it could/would hurt "my" business, because I limit to 4 dogs and it is a business.