Of course they know, but the point is don't be selfish and only concern about your own reservations and try hard to ruin for everybody.

Some will fly under the radar and have their not-cancelled reservations honoured. Case in point, Travelocity flight/hotel package mistake, many got their mistake rates cancelled, but some, like me, had my Las Vegas flight & hotels honored. Don't make a big stink and make sure everybody got cancelled.

Read the post above by Trojanhorse.