Looks like I started quite a discussion. I admit the word unethical was a bit harsh. But I think it still would be better if they would show you a longer than normal cancellation window clearly during the booking process. I missed this.

But there is one other issue, where the policy on the website and in the confirmation seems to be wrong: "....will result in a charge equal to the entire stay "
I emailed the hotel and they responded: "...will result in a charge equal to the first night's stay per room to your credit card."
Loosing one night sounds significantly better than loosing the entire stay.

It is also interesting: booking.com (on the higher cancellable rate which is identical to the best flexible) has a different policy: Cancellation is possible up to two days (not 2 weeks) before arrival. After that booking.com charges the first night.