While I haven't heard much of it lately, the practice you describe has long been part of the underground 'lore' of people using Choice Privileges and being stymied by the relatively short awards window.

The theory is, when you book the room, it is no longer available for an award. Any rooms that are available could very well be booked by the time you get to it, because various elite levels have longer windows. Thus, when you cancel the paid res, it is assumed that the room goes back into the pot of available rooms for awards. Then you snatch it right away.

I haven't done it yet, but I remember varied results from others who have. The problem is, the room you reserve might not be one of those that the hotel make available for rewards. Or, the management may not bother with replenishing the awards pot. Choice properties are semi-notorious for playing a little loosely with the rules. They are franchises, after all.

So, it will cost you nothing to try it, since you can usually cancel with no penalty. Check award inventory before and after you cancel, to see if it has an effect. I'm sure many of us here would be interested in how it plays out.