Yes!
If a guest cancels his reservation made via Booking.com or Hostelworld or if you receive cancellation indirectly to your MyAllocator account, the booking is automatically marked as CANCELLED in FrontDesk Master.
It means that you will not see anymore the booking on the Bed View at all, either on Beds, either in Unallocated Bookings section.
See also:
Where can I see cancelled bookings?