No, you won't be penalized as long as you cancel the reservation.
However, if you cancel multiple reservations, the system will consider your current schedule out-of-date and will automatically clear your listed weekly availability. This isn't meant as a "punishment," but rather as a way to ensure that students don't continue to make reservations based on an outdated schedule.
If you need to cancel the reservation, you should message the student to potentially explain and/or arrange a time to reschedule. This will help you maintain your relationship with the student, even if you need to cancel.