To quote the US DoT's website at
https://www.transportation.gov/indiv...ection/refunds, "A passenger is entitled to a refund if the airline cancelled a flight, regardless of the reason, and the passenger chooses not to be rebooked on a new flight on that airline."
That's pretty plain language, and perhaps it is an oversimplification, but the page is frustratingly citation-free. If the CoC truly conflicts with US CFR, though, the law surely wins.