If you want to use a "Custom" cancellation policy you need to enter your policy under "Custom". Use the context help <span style="color:#007bff;“ >{{#far:question-circle}} </span> next to the setting for "Custom" for instructions.
<span style="color: #f3e504; font-size: 150%;" >{{#fas:lightbulb}}</span> Airbnb does not make the cancellation policy "Firm" available for listings in Italy